Share this article
Strengthening US Dollar Could Bring Further Downside for Bitcoin
With the U.S. dollar eyeing a pre-election recovery, the path of least resistance for bitcoin may be to the downside.
Updated Sep 14, 2021, 9:59 a.m. Published Sep 24, 2020, 11:26 a.m.
Make us preferred on Google
The U.S. dollar is showing signs of life and a continued breakout could weigh over bitcoin, which surged amid the greenback's sharp sell-off this summer.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
- The top cryptocurrency by market value is currently trading at $10,320 – up nearly 2% from Wednesday's low of $10,140, according to CoinDesk's Bitcoin Price Index.
- However, the relief rally could be short-lived, as the dollar index (DXY), which tracks the greenback's value against major fiat currencies, has broken above its two-month-long range of 92.00–94.00.
- "Bitcoin will likely follow further downside together with precious metals given the DXY breakout," Matthew Dibb, co-founder and COO of Stack, a provider of cryptocurrency trackers and funds, told CoinDesk.
- "Bitcoin, like gold, is inversely correlated to the dollar," Max Keiser, a broadcaster and finance analyst tweeted on Tuesday.
- Indeed, bitcoin and the dollar index have moved in opposite directions since March, with the apparent inverse correlation becoming more noticeable since mid-July.
- The DXY is looking north following Wednesday's breakout and is currently hovering near 94.40.
- "The dollar has been very heavy since March on the back of Federal Reserve's easing, and we expect to see some profit-taking [in dollar shorts] across the board," said Darius Sit, CEO of Singapore-based QCP Capital.
- As such, there's a risk bitcoin may fall to the psychological support of $10,000.
- Gold has already declined to a two-month low of $1,860, tracking the dollar strength.
- "A break below $10,000 support could mean a further drop to $8,800," Stack's Dibb said.
- However, on-chain analyst Willy Woo doesn't foresee a mega bump. "While I've heard talk of bearishness down to even [$7,000], I don't see fundamentals supporting this as a likely event," he tweeted Wednesday.
- If stock markets rebound sharply, the haven demand for the U.S. dollar will likely weaken, potentially allowing a notable recovery in bitcoin and gold.
Also read: Bitcoin Market Weakening After Macro-Based Sell-Off, On-Chain Data Suggests
More For You
KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
More For You
Here's what bitcoin bulls are saying as price remains stuck during global rally
It's about a lot more than "zooming out." Supply overhangs and investor "muscle memory" regarding gold help explain bitcoin's poor absolute and relative performance.
What to know:
- Bitcoin has failed so far to act as an inflation hedge or safe-haven asset, lagging badly behind gold, which has surged amid high inflation, wars, and interest rate uncertainty.
- Crypto advocates argue that bitcoin’s weakness reflects a temporary supply overhang, investor “muscle memory” favoring familiar precious metals and its correlation with risk assets, rather than a collapse in long-term demand.
- Many bitcoin proponents still see BTC as a superior long-term store of value and “digital gold,” predicting that, once traditional hard assets are overbought, capital will rotate into bitcoin, allowing it to “catch up” to gold.
Top Stories
