Analysis: The threat of a strengthening dollar to Bitcoin may be overestimated, with weak long-term correlation between the two.
BlockBeats news, September 30 — A stronger dollar is typically seen as a bearish factor for dollar-denominated assets such as Bitcoin and gold. The dollar is the world's primary reserve currency and debt denomination currency. When the dollar appreciates, the repayment costs for dollar-denominated debt borrowers rise, which usually reduces exposure to risk assets. The dollar index has risen about 2.6% since September 9, touching a two-month high of 101.69 on Tuesday; Bitcoin has pulled back from near $87,500 on September 21 to the $83,000 to $84,000 range. A stronger dollar could limit its upside potential, but the current impact is relatively limited.
TradingView data shows that over the past 90 trading days, the correlation coefficient between Bitcoin's daily price movements and the dollar index was -0.41, the lowest level since February 2023, indicating that the two tend to move in opposite directions. However, the corresponding coefficient of determination is only 0.17, meaning the dollar index can only explain about 17% of Bitcoin's daily return volatility. The 30-day correlation coefficient between the two is -0.45, but this result is largely influenced by two special market moves on August 19 and September 3, when Bitcoin rose more than 5% while the dollar index fell; excluding these two days, the correlation coefficient drops to -0.19.
From a longer-term perspective, since January 2020, the average 90-day correlation coefficient between the two has been only -0.14, and it once rose to +0.22 in November 2024. Bitcoin also shows no significant correlation with U.S. Treasury yields, indicating that its price movements are driven more by its own factors. On the technical front, the dollar index has reclaimed its position above the Ichimoku cloud, but has not yet broken through the 101.80 resistance level; if it breaks through, it could end the sideways consolidation since May 2025 and accelerate upward.
