Bitcoin-dollar correlation remains limited as DXY rally explains 17% of daily moves

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Bitcoin-dollar correlation analysis

Highlights

The U.S. Dollar Index (DXY) has risen 2.6% since Sept. 9 to a two-month high of 101.69, coinciding with bitcoin stalling between $83,000 and $84,000 after nearing $87,500.
TradingView analysis shows a 90-day BTC-DXY daily move correlation of minus 0.41, but the R-squared is just 0.17, with DXY explaining only 17% of bitcoin's daily returns.
Since January 2020, bitcoin’s average 90-day correlation with DXY stands at minus 0.14 and sometimes turns positive, highlighting its limited linkage to dollar moves and weak correlation with U.S. Treasury yields.

Recent market data and correlation trends

As reported by CoinDesk, the U.S. Dollar Index, which tracks the dollar against major currencies including the euro and yen, has risen about 2.6% since Sept. 9 and reaches a two-month high of 101.69 on Tuesday.

A firmer dollar typically tightens financial conditions because borrowers with dollar-denominated debt face higher repayment costs and often reduce exposure to riskier assets. In that setting, bitcoin's rally has stalled since Sept. 21, with prices easing to about $83,000 to $84,000 from nearly $87,500, suggesting the dollar's advance may be limiting upside without causing a sharp reversal.

TradingView data analyzed by CoinDesk shows a 90-day correlation of minus 0.41 between daily moves in BTC and DXY, the most negative reading since February 2023. Even so, that relationship translates into an R-squared of 0.17, meaning the dollar index accounts for only around 17% of changes in bitcoin's daily returns.

What the weaker linkage means for crypto markets

The shorter-term picture appears less stable. The 30-day correlation stands at minus 0.45, but that reading depends heavily on Aug. 19 and Sept. 3, when bitcoin jumps more than 5% as DXY falls, and without those sessions the correlation drops to minus 0.19.

On a longer horizon, the connection looks looser still. Since January 2020, the 90-day correlation averages minus 0.14 and at times turns positive, reaching plus 0.22 in November 2024.

Bitcoin also shows little notable correlation with U.S. Treasury yields, reinforcing the view that the token can act as a portfolio diversifier rather than simply tracking macro dollar moves. Whether that relative independence persists remains a key issue for crypto investors watching broader financial conditions.

In our earlier article on the global bond selloff and surging U.S. Treasury yields, we explained how inflation concerns and higher oil prices helped push long-term borrowing costs to multi-year highs. We also noted that investors were increasingly focused on the probability of another Fed rate hike and what elevated yields could mean for wider financial markets.

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