The correlation between bitcoin (BTC) and the Dollar Index (DXY) has reached a 30-day correlation coefficient of -0.90, the most negative reading since September 2022, indicating a strong inverse relationship. This means that when the dollar weakens, bitcoin tends to gain, and vice versa. However, it's essential to consider that this reading can be influenced by bitcoin's 24/7 trading structure, particularly during weekends when the Dollar Index is not trading.
The coefficient of determination is 0.81, suggesting that approximately 81% of bitcoin's short-term price movements are statistically associated with the Dollar Index. Bitcoin's recent rally has stalled after reaching highs above $79,000, coinciding with the DXY bouncing to 98.75 from its April 17 low of 97.63. The outlook for the Dollar Index appears to be supported by broader macro risks, including elevated oil prices and the ongoing U.S.-Iran standoff.
Analysts at Marex noted that 'macro is still trying to lean against' bitcoin's continued rally, citing the rise in oil prices and the constraints in the Strait of Hormuz as headwinds. Despite sustained inflows into U.S.-listed spot exchange-traded funds (ETFs), industry leaders remain cautious.
Anthony Scaramucci, founder of SkyBridge Capital, predicted that bitcoin may not see a meaningful recovery until October or November, aligning with the cryptocurrency's four-year reward halving cycle. The current price action is also influenced by whales and long-time holders selling into ETF-driven demand.
The ether-bitcoin (ETH/BTC) ratio has fallen nearly 3% to its lowest since March 15, breaking down from the short-term ascending channel and pushing below the broader downtrend line. This breakdown reinforces bearish momentum and increases the likelihood of further downside or extended consolidation in the ETH/BTC pair, indicating continued underperformance of ether relative to bitcoin.