What this shows
"When the dollar goes up, Bitcoin goes down" is one of the most repeated rules in crypto macro. This page measures it.
The well-known DXY index is owned by ICE and its data is licensed, so we use the closest free equivalent: the Federal Reserve's dollar index against the currencies of advanced economies (FRED series DTWEXAFEGS). It covers nearly the same currencies as DXY (the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, plus the Australian dollar) and moves almost in step with it. A higher value means a stronger dollar.
We compare the two on weekly Friday closes. That avoids comparing a market that trades five days a week with one that trades seven, and it gives several hundred data points since 2011.
How strong is the link?
As with M2, the first trap is comparing levels: over the full history both the dollar and Bitcoin rose, so their levels look positively correlated, which says nothing. The real test is whether they move against each other week to week.
- Before 2018 there was no link. In Bitcoin's early years its price had little to do with global macro.
- Since 2018 the inverse relationship has been real. In most years the weekly correlation is negative, and since 2020 it sits clearly outside the noise band. In weeks the dollar strengthened, Bitcoin tended to do worse.
- It is still weak. A correlation around −0.2 means the dollar explains only a few percent of Bitcoin's weekly moves. Most of what Bitcoin does has nothing to do with the dollar, and in some years, such as 2024, the link disappeared.
Does the dollar lead Bitcoin?
The last table looks forward: after the dollar rose or fell by more than 2% over 13 weeks, what did Bitcoin do over the next 13? Historically a falling dollar has been followed by much better Bitcoin returns than a rising one, and the gap is larger since 2020.
Read it with care. The 13-week windows overlap, so the hundreds of weeks in each row come down to only a handful of independent episodes. A few big episodes carry much of the result: the weak-dollar stretches of 2013, 2017, late 2020 and 2023 each overlapped with a large Bitcoin rally. It is a real pattern worth knowing, not a dependable trading rule.
How to use it
- Treat a strongly rising dollar as a headwind for Bitcoin and a falling dollar as a tailwind, all else equal.
- Check the rolling chart: when the correlation sits inside the gray band, the dollar hasn't been telling you much lately.
- Combine it with Bitcoin's 200-week moving average or the Fear & Greed Index, since the dollar explains only a small part of Bitcoin's moves.
FAQ
Is Bitcoin inversely correlated with the dollar (DXY)? Since about 2018, yes, but weakly: weekly changes in the dollar index and Bitcoin have had a correlation of around −0.2, clearly beyond random noise since 2020 but explaining only a small part of Bitcoin's moves. Before 2018 there was no measurable link.
Why don't you use the actual DXY? DXY is a licensed index owned by ICE. We use the Federal Reserve's dollar index against advanced-economy currencies, which covers almost the same currencies and is freely published by the St. Louis Fed.
Does a weaker dollar make Bitcoin go up? Historically, periods after the dollar fell by more than 2% over 13 weeks were followed by better Bitcoin returns than periods after it rose. But there are only a few independent episodes behind that, so it is a tendency, not a rule.
How often is this page updated? Daily. The Federal Reserve publishes the dollar index with a delay of a few days, so the latest week shown can trail today's date.