Bitcoin set to face pressure as Dollar Index nears breakout after Fed hawk tone
Bitcoin (BTC) is moving lower for a third straight day as the Dollar Index (DXY) strengthens ahead of what traders may see as a major breakout. BTC trades near $63,900, down about 1% since midnight UTC, while several altcoins are outperforming, including HASH, XLM, and ENA (each up 7%+).
The Dollar Index has risen 0.26% to 100.66, extending Wednesday’s 0.8% gain. The key change is positioning: DXY is near a confirmed break out of a 13-month trading range. Historically, a stronger Dollar Index has weighed on dollar-denominated risk assets, including Bitcoin.
BTC also remains highly sensitive to USD moves. The article cites a 90-day correlation of minus 0.82 between BTC and DXY, meaning they typically move in opposite directions. The catalyst highlighted is a hawkish tone from the Fed on Wednesday, which has renewed rate-rises concerns.
If the Dollar Index keeps gaining, Bitcoin could remain under pressure and may retest its 200-week simple moving average around $62,258. Kraken analysts say falling below that level has historically led to a median return above 100% over the next one and three years—though other analysts warn a deeper selloff is possible if BTC breaks more decisively.
Traders are advised to watch DXY daily levels and BTC versus the 200-week average for confirmation of the next trend impulse.
Bearish
The piece frames Bitcoin risk through the lens of macro FX: a hawkish Fed is supporting the U.S. dollar, and the Dollar Index is near a breakout from a 13-month range. Historically, Bitcoin tends to move opposite the Dollar Index (the article cites a strong negative 90-day correlation). That makes the near-term setup unfavorable for BTC bulls as DXY strength can translate into persistent USD headwinds.
In the short term, a decisive DXY breakout typically encourages momentum chasing in the direction of the dollar, which often drains liquidity from dollar-sensitive crypto. BTC is also described as vulnerable to a retest of the 200-week SMA around $62,258, which would likely intensify selling pressure if it breaks.
However, the article notes a longer-horizon nuance from Kraken: dips below the 200-week average have historically been followed by strong median returns over 1–3 years. That can mean the move could become “painful but potentially buyable” later. Still, until the Dollar Index breakout is digested and BTC holds key technical levels, the immediate trading impulse looks bearish.