Bitcoin holds firm as the U.S. dollar strengthens
Bitcoin has kept most of its gains since early August even as the U.S. dollar index rebounded from about 98.4 to above 101. The usual inverse relationship between the two assets has temporarily weakened, with BTC trading around $84,600 after nearing $87,000. A sharp move toward $87,000 triggered nearly $1 billion in crypto liquidations, mostly short positions.
Bitcoin began August near $63,000 and climbed through $70,000 and $80,000, recently touching about $87,000 before easing to roughly $84,600. Meanwhile, the dollar index fell from around 101.6 in July to 98.4 in early September, then recovered above 101. That divergence has temporarily weakened their usual opposing pattern.
A push toward $87,000 liquidated almost $1 billion in crypto positions, with roughly $900 million from bearish bets. After failing to hold that level, Bitcoin fell to $83,508 on September 24, triggering another $583 million in market-wide liquidations. The Fed’s recent 25-basis-point hike took rates to 3.75–4%, though Bitcoin initially stayed near $76,300.
The resilience of Bitcoin despite a stronger dollar may affect retail and institutional crypto investors, especially those using leverage, as sharp moves can trigger liquidations. A weaker inverse link could complicate portfolio hedging and risk models. If the pattern persists, savers and payment firms may reassess crypto as an inflation or dollar hedge, though volatility and Fed policy remain key.