The relationship between bitcoin (BTC) and the Dollar Index (DXY) has become notably pronounced, with a 30-day correlation coefficient of -0.90, the most negative reading since September 2022. This implies a strong inverse relationship, where a weakening dollar leads to bitcoin gains and vice versa. However, it's essential to consider that bitcoin's 24/7 trading structure can influence this reading. The coefficient of determination indicates that approximately 81% of bitcoin's short-term price movements are statistically linked to the Dollar Index.
Following a rally stall after reaching highs above $79,000, the DXY has rebounded to 98.75 from its April 17 low of 97.63. The outlook for the Dollar Index appears supported by broader macro risks, including elevated oil prices and the ongoing U.S.-Iran standoff. Analysts note that macro factors are still resisting bitcoin's continued rally, citing rising oil prices and the constrained Strait of Hormuz as headwinds.
Despite this, sustained inflows into U.S.-listed spot exchange-traded funds (ETFs) are supporting prices. Industry leaders, such as Anthony Scaramucci, remain cautious, predicting that bitcoin may not see a significant recovery until October or November, aligning with its four-year reward halving cycle. The current price action is also influenced by whales and long-time holders selling into ETF-driven demand.