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, indicating a strong inverse relationship. This means that when the dollar weakens, bitcoin tends to gain, and vice versa. The coefficient of determination stands at 0.81, suggesting that approximately 81% of bitcoin's short-term price movements are statistically associated with fluctuations in the Dollar Index. Bitcoin's recent 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 geopolitical tensions, are expected to support the Dollar Index. Analysts warn that these factors may hinder bitcoin's continued rally, with some predicting a meaningful recovery only in October or November.
Meanwhile, sustained inflows into US-listed spot exchange-traded funds are providing price support, but industry leaders remain cautious. The ether-bitcoin ratio has fallen nearly 3% to its lowest level since March 15, confirming a downside break from its short-term ascending channel and pushing it back 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.