$BTC The US Dollar Index (DXY) and Bitcoin (BTC) primarily exhibit a negative (inverse) relationship, but this relationship is not absolute and can change with macroeconomic conditions and market narratives.
In simple terms: when the dollar is strong, Bitcoin is usually weak; when the dollar is weak, Bitcoin is usually strong.
From the chart, it can be seen that the points where the US Dollar Index encounters resistance and declines are the lowest points for Bitcoin's rebound. Similarly, the points where the US Dollar Index rebounds are also the points where Bitcoin reaches a short-term peak.
Current situation analysis:
The market is currently in a delicate balance. In the second half of 2025, as the Federal Reserve deepens its interest rate cut cycle, the US Dollar Index is expected to retreat from the high above 100, providing a macro basis for Bitcoin to challenge the $90,000-$100,000 range. Currently, both have temporarily returned to a relatively typical negative correlation logic: as long as the US Dollar Index does not rebound significantly back above 103, the high support for Bitcoin remains relatively solid.
The US Dollar Index is the "inverse wind vane" for Bitcoin prices.
Short term outlook: Watch the 15-minute or 1-hour K-line of DXY; if DXY surges rapidly, BTC usually experiences a sharp drop.
Long term outlook: As long as the dollar remains in a weak range below 100, the logic of a major bull market for Bitcoin usually still holds.
If you are trading BTC, it is advisable to use the US Dollar Index as an auxiliary filtering indicator, rather than the sole basis for entering trades:
Observe trend divergence:
If you want to go long on Bitcoin, it is best to wait for DXY to show a clear top structure or be in a downtrend.
If you find DXY strongly breaking through key resistance levels (e.g., breaking the 100 mark), the risk of going long on BTC is very high, and you should reduce your position or wait.
Key point resonance:
When BTC drops to key support levels while DXY rises to key resistance levels and shows signs of stagnation, this is a high-probability buying (going long) signal.
Pay attention to "decoupling" signals:
If DXY drops sharply, but BTC does not rise and even declines, it indicates that the internal funds in the crypto space are extremely weak (the main force is unloading), which is a very dangerous bearish signal.
