Bitcoin Defies Dollar Strength as October Looms

The US Dollar Index (DXY) has been on a tear this month, gaining nearly 2% in September and heading for its best month since June. This hawkish turn at the Federal Reserve has weighed on Bitcoin's price, but surprisingly, BTC has still managed to gain 6.14% this month.

The DXY rose to 101.61 on September 29, its highest level since late July, and is closing in on its highest close since April 2025, according to Barchart. The rally reflects the Fed's hawkish signals, including a quarter-point rate hike on September 16.

Bitcoin has historically moved inversely to the dollar, but this month it has bucked the trend, posting a gain despite the dollar's strength. In fact, September has averaged a 2.42% loss for Bitcoin, making its current price performance all the more remarkable.

The rally has also produced two signals that earlier cycles tied to recoveries: Bitcoin posted its first weekly close above its 50-week moving average since November 2025 on September 20, and it recently had a golden cross after 293 days below its 200-day average on September 8. Past crosses after similar deep resets have preceded stronger rallies, but Binance Research cautioned that its sample is small.