The relationship between bitcoin (BTC) and the Dollar Index (DXY) has become notably pronounced, with the 30-day correlation coefficient reaching -0.90, the most negative reading since September 2022. This implies that when the dollar weakens, bitcoin tends to gain, and vice versa, with approximately 81% of bitcoin's short-term price movements statistically associated with moves in the Dollar Index. However, it's essential to consider that bitcoin's 24/7 trading structure, including weekend price fluctuations not reflected in the weekday-only trading of the Dollar Index, can influence this reading.
Bitcoin's recent rally has stalled after reaching highs above $79,000, coinciding with a bounce in the DXY to 98.75 from its April 17 low of 97.63. The outlook for the Dollar Index is supported by broader macro risks, including elevated oil prices due to disruptions in the Strait of Hormuz and ongoing U.S.-Iran tensions. Analysts note that these macro factors are leaning against bitcoin's continued rally, with oil prices rising for five straight sessions and the Strait of Hormuz remaining constrained, which could keep inflation concerns alive and prevent risk premia from fully unwinding. Despite these challenges, sustained inflows into U.S.-listed spot exchange-traded funds (ETFs) are supporting prices, although industry leaders remain cautious.
Anthony Scaramucci, founder of SkyBridge Capital, suggests that bitcoin may not experience a meaningful recovery until October or November, aligning with its four-year reward halving cycle, and notes that whales and long-time holders are selling into ETF-driven demand. The ether-bitcoin (ETH/BTC) ratio has also seen a significant decline, falling nearly 3% to its lowest since March 15, which has bearish implications, including a downside break from the short-term ascending channel and a push below the broader downtrend line since August, pointing to continued underperformance of ether relative to bitcoin.