Bitcoin (BTC) price upside potential heavily depends on its correlation with the US Dollar Index (DXY), with recent data showing that BTC folded as investors mused on the Federal Reserve’s (Fed) decision to pause interest rate hikes for September. This occurred while they anticipated a stronger financial grip going forward. At the time, BTC price dropped below the $27,000 support, with subsequent attempts to reclaim above this psychological level proving to be a hard task until the big break on October 1.

Bitcoin (BTC) correlation with the US Dollar Index has hit a 10-month high, at 0.73 based on historical correlation data according to IntoTheBlock. The last time it came this high was around December 2022, when it recorded a correlation of almost 0.90. A correlation coefficient ranges from -1 to 1, with -1 indicating a perfect inverse relationship, 1 indicating a perfect direct relationship, and 0 indicating no relationship. In this context, a 0.73 or 0.90 correlation would indicate a strong positive relationship.
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