Dollar Strength Tests Bitcoin Market Direction as Spot ETF Outflows Reach $1 Billion

Dollar strength has brought renewed attention to Bitcoin's market direction as the US Dollar Index (DXY) breaks above a double-bottom pattern. This breakout could test Bitcoin's ability to maintain its current price level, which has been influenced by a mix of dollar weakness and ETF inflows in recent months.

The DXY has broken above the 0.618 Fibonacci level at 98.548 and is moving towards its next resistance area around 100.393. Momentum indicators such as the Relative Strength Index (RSI) and MACD histogram support this move, but a close below 97.408 would weaken the bullish setup.

Bitcoin's correlation with DXY has shown mixed results in recent months. While the inverse relationship between dollar strength and Bitcoin price movements has been observed historically, 2026 has seen periods of both positive and negative correlation. Crypto analyst Carl Moon noted that a rally in DXY may signal a potential increase in Bitcoin prices.

Spot Bitcoin ETFs have recorded $1 billion in net outflows over the past week, following a six-week streak of inflows totaling $3.4 billion. This could add pressure on Bitcoin's price if outflows continue to grow.