Today Bitcoin and Dollar Fall: Here’s Why
Today, both the price of Bitcoin and the Dollar Index are declining.
The dynamics underlying this decline are different, but in the medium term, the inverse correlation remains active.
It is therefore advisable to separately analyze the trend of Bitcoin and the dollar, and then compare the medium-term trend only at a later stage.
Bitcoin’s Performance
After the lowest point of this phase reached on November 21, 2025, the decline in Bitcoin’s price halted, and a prolonged phase of sideways movement began, lasting at least until the first of January this year.
In the first five days of the year, it attempted an initial rebound, reaching nearly $95,000, but until the tenth of the month, a correction occurred that nullified that attempt.
However, starting from January 12, another attempt began that actually seems to have a greater chance of succeeding.
This second rebound attempt in 2026 started at $90,000, and initially surged to nearly $98,000 two days later.
Starting from Thursday the 15th, a correction began that theoretically could still be ongoing today, with the drop below $93,000, but it might also be only temporary.
In fact, starting from December 25, 2025, the aforementioned lateralization might have ended, and instead, an upward phase could have begun.
For now, this upward trend is not yet clearly visible, also because the current price is in line with that of January 5th, but by plotting a linear regression of the daily price trend from December 25th to today, the trend emerges.
However, it should be added that today, in theory, the price of BTC should be around $95,000 if it were strictly following that trend, but since it is actually moving within an ascending channel, not even a temporary drop to $90,000 would cause it to exit.
The Trend of the Dollar
On December 24, 2025, the Dollar Index reached the lowest peak of this phase.
Two days later, an upward phase began, which, however, might have concluded today.
To be honest, since Thursday, January 15, the Dollar Index has been attempting to break through the resistance set just above 99.4 points, but without success.
After two unsuccessful attempts, today it seems to have given up, as it has returned to the levels of January 14, namely below 99.2 points.
There is therefore the possibility that the upward trend of recent weeks has halted, and that this week may consolidate around the 99.0 points level.
On the Dollar Index, there are actually two prevailing trends, both stronger and more significant in importance.
The first is the long-term one, which actually began at the end of 2007 and has therefore been ongoing for more than 18 years. It is an upward trend, likely underpinning the increasing imbalance of the U.S. trade balance with foreign countries, so much so that it seems probable President Trump might want to try to bring it to an end.
At this stage, the support level below which it might eventually end appears to be set around 97.3 points.
The second is the medium-term trend, which started roughly a year ago, and is declining. The key point lies in whether this medium-term bearish trend is capable of ending the long-term bullish trend.
The Relationship Between Bitcoin and the Dollar
In the medium term, the price trend of Bitcoin in US dollars (BTCUSD) tends to be inversely correlated with the Dollar Index (DXY).
In the long term, however, BTCUSD tends to be correlated with the USCPI/DXY ratio, where USCPI is the consumer price index in the USA that effectively measures inflation.
In the short term, however, these correlations can temporarily break, as happened starting from early November 2025.
In fact, due to the minor liquidity crisis caused by the longest U.S. government shutdown in history, the price of Bitcoin fell in November just as the DXY was also declining. In theory, BTCUSD should have risen, but it failed to do so because of the aforementioned minor liquidity crisis.
This divergence widened until November 22, then stabilized starting from the following day.
The Forecasts
It is possible that, in the medium term, this divergence may be absorbed, perhaps with a rise in the price of Bitcoin.
In fact, it is also possible that the Dollar Index continues to decline, remaining within that medium-term descending channel which could eventually lead it out of the long-term ascending channel.
Therefore, there is a possibility that the Dollar Index may not rise significantly over the coming weeks, somehow forcing the price of Bitcoin to increase in order to bridge the divergence.
Indeed, should the Dollar Index decline even further, BTCUSD should rise even more just to prevent the divergence from widening further.
However, it is crucial to clearly distinguish between short-term movements, medium-term trends, and long-term shifts.
In the short term for Bitcoin, the key is to remain within the small ascending channel that has been in place since January 26, while for the Dollar Index, it is necessary to re-enter the medium-term descending channel that began a year ago.
In the medium term, this could lead to a bearish breakout of the DXY from the ascending channel that has lasted for over 18 years, with a potential further rise in BTCUSD.
In the long term, however, sooner or later the Dollar Index might rebound and exit the medium-term descending channel, and this could end up sending Bitcoin into a bear-market. However, making long-term forecasts is always very difficult and risky, so much so that the likelihood of them eventually proving incorrect is significant.
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