The relationship between bitcoin and the Dollar Index has reached an almost four-year extreme, with the 30-day correlation coefficient standing at -0.90. This indicates a strong inverse relationship, where a weakening dollar corresponds to bitcoin gains and vice versa. The coefficient of determination suggests that approximately 81% of bitcoin's short-term price movements are statistically linked to the Dollar Index.
Despite this, bitcoin's rally has stalled after reaching highs above $79,000, coinciding with a bounce in the Dollar Index. Broader macro risks, including elevated oil prices and the U.S.-Iran standoff, appear to be supporting the Dollar Index. Analysts note that these factors may continue to pose a headwind for bitcoin's rally, with some industry leaders adopting a cautious approach.
The sustained inflows into U.S.-listed spot exchange-traded funds are providing price support, but whales and long-time holders are selling into this demand, aligning with bitcoin's four-year reward halving cycle. Meanwhile, the ether-bitcoin ratio has fallen to its lowest level since March 15, breaking down from a short-term ascending channel and pushing below a broader downtrend line. This breakdown reinforces bearish momentum and suggests further downside or extended consolidation in the ETH/BTC pair, indicating continued underperformance of ether relative to bitcoin.