The U.S. Dollar Index (DXY) is rallying, which is usually seen as bad news for bitcoin BTC$83,496.77 and other dollar-denominated assets such as gold. The data suggest the link is weaker than that view implies
DXY, which tracks the dollar against a basket of major currencies, including the euro and the yen, has gained about 2.6% since Sept. 9 and hit a two-month high of 101.69 on Tuesday
The dollar is the world's reserve currency and sits at the center of global finance and debt. When it rallies, borrowers with dollar debt face higher repayment costs and tend to cut exposure to risky assets. A weaker dollar has the opposite effect
So in theory, a stronger dollar should weigh on bitcoin. BTC's rally has indeed stalled since Sept. 21, with prices pulling back to $83,000-$84,000 from nearly $87,500. A firmer dollar may be capping the upside, but the damage so far is small
Besides, correlation data backs up that resilience. Over the past 90 trading days, daily moves in BTC and DXY show a correlation of -0.41, according to TradingView data analyzed by CoinDesk. A negative reading means the two tend to move in opposite directions. That is the most negative since February 2023
However, while the link is real, it is also modest, as the feature image shows. The correlation implies an R-squared of 0.17, meaning DXY accounts for only about 17% of the variation in BTC's daily returns
The shorter-term reading is noisier. The 30-day correlation is -0.45, but it leans on two days, Aug. 19 and Sept. 3, when BTC jumped more than 5% as DXY fell. Without them, it drops to -0.19
Zoom out further and the link looks looser still. Since January 2020, the 90-day correlation has averaged -0.14, and it has turned positive at times, peaking at +0.22 in November 2024
Bitcoin also shows little notable correlation with U.S. Treasury yields, as CoinDesk discussed recently
Together with its loose link to the dollar, that supports the case for bitcoin as a portfolio diversifier, an asset that moves largely on its own drivers. Whether that independence lasts is worth watching. Stay alert!
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The chart shows Dollar Index’s daily price swings in candlestick format
The DXY is again trading above the Ichimoku cloud, a momentum indicator, indicating a strengthening bullish momentum. However, it is yet to take out the immediate resistance at 101.80, the high hit on June 24
A move beyond that would mark a bullish resolution to a consistent sideways choppy trading since May 2025, potentially accelerating gains
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