Will Bitcoin rise or fall as a result?

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Bitcoin is showing resilience, breaking away from traditional stocks and gold despite the strength of the US dollar.

Institutional demand for bitcoin remains strong, as recent net inflows of $1.5 billion by ETFs in seven days show.

Bitcoin (BTC) successfully defended the $68,000 level on Tuesday despite a 1% drop in the Nasdaq 100 Index and a 3.6% drop in gold prices. Although bitcoin has initially diverged from traditional markets, traders are concerned that the US dollar may be facing a protracted war with Iran, as the US dollar strengthens against other major currencies.

The US dollar index (DXY) hit 99.4 on Tuesday, up from 96.6 just three weeks ago. This strength of the U.S. dollar is reflected in cash and government bonds for investors seeking safety, especially in symbols associated with a risk-off environment. Conversely, periods of DXY weakness often coincide with positive returns for Bitcoin, such as the bull run seen from March to August 2025.

However, a broader analysis shows that the US Dollar Index is below the 105-110 range set for November 2024 to March 2025. The last 12 months certainly reflect a strengthening, not a lasting strength. Bitcoin's recent breakout from tech stocks seems even more significant, as the correlation is up even less than 6% in previous Nasdaq 100 trading.

The 30-day rolling correlation between Bitcoin and the Nasdaq 100 has fallen to 69% after rising 92% a week ago. Bitcoin's market identity has changed over time, variously as an independent monetary system, digital gold, an unstoppable onchain database, or a speculative vehicle. Therefore, predicting a Bitcoin crash based on the strength of the US dollar seems inappropriate.

As of October 10, 2025, an undeniable lack of bullishness continues due to the flash crash, quantum computing concerns, disillusionment with the US strategic bitcoin reserve process, and investor focus shifting to AI. Traders are still looking for a different reason for the decline to $60,000, adding fear and uncertainty.

Bitcoin bear market increases the impact of negative news

A recent US Securities and Exchange Commission (SEC) filing from Mara Holdings (MARA US) has led market participants to misinterpret the company's Bitcoin reserve strategy. Traders have expressed concern that MARA could repeat the actions of other popular miners such as Cango (CANG US), Bitdeer (BTDR UR) and Core Scientific (CORZ US), which recently wiped out all of their Bitcoin holdings.

MARA's vice president of investor relations, Robert Samuels, denied those rumors, saying the company “may buy or sell from time to time,” but that doesn't mean there's any intention to divest most of its assets. Market participants reacted aggressively ahead of this clarification, as Bitcoin was in a bear market as competitors shifted their core business models to AI data centers.

Related: Bitcoin Price Chart ‘Death Cross' Returns, Rekindling Late Cycle Fears

The relative strength in the US Dollar Index should not be viewed as an automatic sell signal for Bitcoin. This is especially true as gold shows signs of fatigue, retesting the $5,000 support with a 25% year-to-date rally in 2026. Bitcoin holders still face a difficult path to regain confidence after a 52% decline from an all-time high, as gold shows signs of fatigue.

The $1.5 billion net increase in Bitcoin exchange-traded funds since February 24 serves as a clear indication of the acceleration of institutional interest. However, traders expect a definitive breakout above $75,000 before concluding that the bear market is over. Until that threshold is met, data points such as the US Dollar Index will continue to exert negative pressure on Bitcoin despite its current weak correlation.