The U.S. dollar index closed above 100 for the first time in two months on Monday, touching an intraday high of 100.174. Bitcoin briefly climbed 5% to reclaim the $63,000 level but quickly gave back most of those gains, trading at $62,615 by late afternoon. A stronger dollar historically weighs on Bitcoin and other risk assets as capital shifts into safer havens, and this time was no different.
DXY hits a two-month high
The greenback’s rally came after a stronger-than-expected U.S. jobs report. Nonfarm payrolls increased by 172,000 in May, beating market forecasts. That gave the dollar a boost and reinforced the narrative that the economy is still running hot — just as the Federal Reserve prepares to meet later this month.
Bond markets took notice. The probability of a Fed rate hike in December jumped to above 70%, up from 45% just a week earlier. Traders are now pricing in a more aggressive path for monetary tightening, which typically pulls liquidity out of speculative assets like cryptocurrencies.
Trader calls it a 'make or break' moment
Matthew Dixon, a trader who tracks the relationship between Bitcoin and the dollar, pointed to the multi-month inverse correlation between DXY and BTC. He described current levels as a “make or break” point for the pair. If the dollar keeps climbing, Bitcoin could struggle to hold recent gains. If DXY falters, crypto might get some breathing room.
Mid-June Fed meeting in focus
The Federal Reserve’s policy gathering under Chair Kevin Warsh is scheduled for mid-June. Markets expect the statement and press conference to deliver a hawkish tone, which would likely support the dollar further and keep pressure on risk assets. Investors are watching for any change in language around inflation or employment that could signal the timing of the next rate move.
For now, Bitcoin is stuck in a tight range just below $63,000, while the dollar sits at a key psychological level. The next few days could determine whether the macro winds shift again — or keep blowing against crypto.
