The Threat of a Stronger Dollar to Bitcoin is Overstated, with Weak Correlation
On September 30, the strengthening of the dollar is viewed as a bearish factor for dollar-denominated assets such as Bitcoin and gold. The dollar index has risen about 2.6% since September 9, reaching a two-month high of 101.69 on Tuesday. Bitcoin has fallen back to the range of $83,000 to $84,000 after approaching $87,500 on September 21. While the stronger dollar may limit its upside potential, the current impact is relatively limited. According to TradingView data, the correlation coefficient between Bitcoin and the dollar index over the past 90 trading days is -0.41, the lowest level since February 2023, indicating that the two tend to move in opposite directions. The coefficient of determination is only 0.17, meaning the dollar index can only explain about 17% of the fluctuations in Bitcoin's daily returns. The 30-day correlation coefficient between the two is -0.45, but this result is influenced by two special market conditions on August 19 and September 3; after excluding these, the correlation coefficient drops to -0.19. Since January 2020, the average 90-day correlation coefficient between the two has been only -0.14, having risen to +0.22 in November 2024. Bitcoin has also not shown significant correlation with U.S. Treasury yields, indicating that its movements are largely driven by its own factors. Technically, the dollar index has re-entered the Ichimoku cloud but has not yet broken through the resistance level of 101.80; if it does break through, it may end the sideways consolidation that has been ongoing since May 2025 and accelerate upward.
-- Price
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