The correlation between bitcoin's price and the Dollar Index has reached its most extreme level in nearly four years, with a 30-day correlation coefficient of -0.90. This indicates a strong inverse relationship, where a weaker dollar leads to bitcoin gains and vice versa. The coefficient of determination stands at 0.81, suggesting that approximately 81% of bitcoin's short-term price movements are statistically linked to changes in the Dollar Index. Despite this correlation, bitcoin's recent rally has stalled following a bounce in the Dollar Index.
Broader macro risks, including elevated oil prices and US-Iran tensions, are expected to support the Dollar Index. Analysts caution that these factors may hinder bitcoin's continued rally, with some predicting a meaningful recovery only in the latter part of the year. Meanwhile, the ether-bitcoin ratio has fallen to its lowest level since March 15, indicating bearish momentum and potential further underperformance of ether relative to bitcoin.