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How strong is the link between the dollar index and Bitcoin?

Bitcoin and the DXY have shown a stronger inverse relationship recently, but the data suggest this is not the only major market force at work. According to CoinDesk’s review of TradingView data, moves in the dollar index can influence BTC prices, but the effect is not as powerful as it may seem.

Over the last 90 trading days, the correlation between BTC and the daily moves in the DXY was calculated at -0.41. A negative coefficient indicates that the two assets often move in opposite directions, and this reading stands out as the strongest inverse relationship seen since February 2023.

Even so, the statistical link remains limited. The R-squared value of 0.17 derived from the data shows that movements in the dollar index explain only about 17% of the variation in Bitcoin’s daily returns. In other words, most of BTC’s volatility is driven by other factors.

Two days stood out in short-term correlation

Looking at a shorter time frame, the 30-day correlation stands at -0.45. But that picture appears to have been heavily influenced by moves on August 19 and September 3, in particular.

On those two days, Bitcoin rose by more than 5% while the dollar index declined. When those days are removed from the calculation, the 30-day correlation falls to -0.19, suggesting the short-term picture is noisier and more fragile.

  • On August 19 and September 3, BTC gained more than 5%.
  • At the same time, declines in the DXY made the short-term negative correlation stand out.

The longer-term relationship looks looser

Over a broader period, the dollar-Bitcoin link appears weaker. Since January 2020, the average 90-day correlation has been -0.14. The relationship has even turned positive at times, peaking at +0.22 in November 2024.

The link with bond yields is also unclear

The report also noted that Bitcoin has not shown a meaningful correlation with U.S. Treasury yields either. A loose relationship with the dollar index and a limited connection to bond yields support the view that Bitcoin may still serve as a diversification tool in portfolios.

Even so, whether that independence will last remains one of the key questions for markets to watch. For now, the data suggest that a stronger dollar does not create an automatic or fully explanatory drag on Bitcoin.

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