The US Dollar Index is moving toward the 101 level after a breakout from a double-bottom pattern on the daily chart. The move has brought fresh attention to Bitcoin, which has often weakened during past periods of dollar strength.
Bitcoin was trading near $80,605, up 0.97% in 24 hours and 8.71% over the past 30 days. However, recent ETF outflows and changing market flows have made the link between Bitcoin and the dollar less direct.
The US Dollar Index recently traded near 99.124 after breaking above the 0.618 Fibonacci level at 98.548. The daily chart shows a W-formation across April and May, with a measured target near 101.075.
The next resistance area sits around 100.393, which also lines up with the 1.0 Fibonacci extension. A move above that level would place DXY closer to its projected target and extend the dollar’s recent strength.
Momentum indicators also support the dollar’s current move. The Relative Strength Index has moved toward 60, while the MACD histogram has turned green and expanded.
However, the bullish setup would weaken if DXY closes below 97.408 on the daily chart. That level aligns with a support zone on the chart and remains a key area for traders watching the dollar trend.
Bitcoin and the US Dollar Index have often moved in opposite directions over the past decade. Bitcoin rallies in 2013, 2017, and 2020 came during periods of dollar weakness.
On the other hand, stronger DXY phases in 2014, 2018, and 2022 matched deep Bitcoin drawdowns. That pattern has made dollar strength a key macro factor for Bitcoin traders.
Still, 2026 has shown a more mixed setup. Daily correlation data showed Bitcoin and DXY moving together in late January, early February, mid-March, and early April.
The pattern changed again from mid-April into May. DXY rallied while Bitcoin held near $80,000, bringing the inverse relationship back into focus.
Crypto analyst Carl Moon wrote, “$DXY looks like it wants to pump now. You know what that means for $BTC.” His chart also showed both assets moving higher in a forward projection, which left doubt over whether the old pattern still holds.
Spot Bitcoin ETFs recorded $1 billion in weekly net outflows, ending a six-week inflow streak. That earlier run had brought in $3.4 billion across the products.
The week began with $27.29 million in inflows on Monday, according to SoSoValue data. However, investors pulled $233.25 million on Tuesday.
Selling deepened on Wednesday, when outflows reached $635.23 million. Thursday brought $131.31 million in inflows, but Friday saw another $290.42 million leave the funds.
As a result, the week ended with exactly $1 billion in net outflows. Total net assets stood at $104.29 billion, while cumulative net inflows across the products remained at $58.34 billion.
The dollar’s rally has followed stronger US economic data and renewed expectations for tighter Federal Reserve policy. Traders have raised rate-hike bets after recent jobs and inflation figures showed continued economic strength.
Federal Reserve officials have also maintained a hawkish tone. Their comments kept attention on inflation and reduced expectations for early policy easing.
Meanwhile, Bitcoin traders are watching the $80,000 support area. Bitunix analysts said the market has entered a ‘high-leverage volatility structure,’ with short liquidity placed around $82,400 to $82,600.
Bitcoin’s next move may depend on whether ETF outflows continue while DXY pushes toward 101. If Bitcoin holds firm, the decoupling case may gain more attention. If Bitcoin drops, the long-running inverse link with the dollar may return to the center of market analysis.
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