Bitcoin Faces Pressure as U.S. Dollar Index Nears Major Breakout

Bitcoin (BTC) remains under selling pressure for a third consecutive day as the U.S. Dollar Index (DXY) strengthens and approaches a significant technical breakout. The leading cryptocurrency traded near $63,900, slipping almost 1% over the past 24 hours, while most major digital assets also posted losses. A handful of tokens, including HASH, Stellar (XLM), and Ethena (ENA), outperformed the broader market with gains exceeding 7%.

Meanwhile, the U.S. Dollar Index, which measures the value of the dollar against a basket of major global currencies, climbed to 100.66 after extending Wednesday’s strong rally. Market analysts are closely watching the index as it tests resistance levels that have capped gains since mid-2025. A successful breakout from this 13-month trading range could trigger additional buying momentum and strengthen the greenback further.

Historically, Bitcoin and the DXY have shown a strong inverse relationship. Recent data indicates BTC’s 90-day correlation with the Dollar Index stands at approximately -0.82, highlighting how a stronger dollar often places downward pressure on the cryptocurrency market. As investors shift toward the safety of the U.S. currency, demand for risk assets such as Bitcoin can weaken.

The dollar’s recent strength has been fueled by the Federal Reserve’s hawkish stance on monetary policy, which has increased expectations that U.S. interest rates could remain elevated. If the DXY continues its upward trajectory, Bitcoin may face additional downside risk and could retest its important 200-week simple moving average near $62,258.

According to economists at crypto exchange Kraken, previous declines below this long-term technical level have historically delivered median returns exceeding 100% over one- and three-year periods. However, some market analysts caution that a sustained break below the average could trigger a deeper correction.

With macroeconomic conditions and Federal Reserve policy remaining key market drivers, traders are closely monitoring both Bitcoin price action and the Dollar Index for clues about the next major move in the cryptocurrency market.