Dollar's Best Month Since June Leaves Bitcoin Unmoved

The U.S. Dollar Index looks set to cap off its strongest month since June, with a gain of nearly 2% this September. The Federal Reserve's hawkish stance has been a constant backdrop.

A firmer dollar usually pressures Bitcoin, but the top cryptocurrency has risen 6.14% so far in September. It now enters October, which historically posts the best median return among months.

What Has Fueled the Dollar's Strongest Month Since June

The index reached 101.61 on September 29, the best level seen since late July. Wednesday saw it hovering near 101.4. Barchart notes that the DXY is also nearing its highest close since April 2025.

U.S. Dollar Index $DXY approaching its highest closing price since April 2025

— Barchart (@Barchart), September 29, 2026

A hawkish turn at the Fed, which raised rates by a quarter point on September 16, is driving the rally. Officials have since kept the door open to further hikes.

Michael Barr, a Fed governor, stated that further increases are probably necessary to get inflation back to its target. Meanwhile, New York Fed President John Williams indicated that another hike might be suitable near the end of the year.

Energy prices are contributing to the inflation concerns that sustain the Fed's hawkish stance. Oil remains high as negotiations between the US and Iran stay stalled. In addition, the 30-year Treasury yield recently reached its highest point since 2002.

Bitcoin Holds Steady as the Dollar Strengthens

Bitcoin and the dollar have generally moved in opposite directions, meaning a stronger dollar usually weighs on BTC. This month's advance defies seasonal patterns, since September has historically averaged a 2.42% decline.

The uptrend has also generated 2 signals that past cycles have associated with recoveries. Bitcoin logged its first weekly close above its 50-week moving average since November 2025 on September 20. Alex Thorn of Galaxy noted that reclaims like this have historically marked bear market bottoms.

Binance Research, for its part, pointed out that the golden cross on September 8 followed 293 days spent below the 200-day moving average. Similar crosses after such sharp resets have historically led to bigger rallies, although the firm warned that its sample size is limited.

October has a more robust historical profile. Bitcoin has ended the month in positive territory in 10 out of 13 years, producing an average return of 19.92%. Its median return for the month stands at 14.71%, topping all other months.

PCE and Jobs Reports Could Test Bitcoin's Resolve

Attention now shifts to Wednesday's Personal Consumption Expenditures (PCE) price index, which the Fed watches as its favored measure of inflation. Friday brings the monthly employment report.

Above-forecast figures could revive odds of an October hike, which had recently dropped to roughly even. The central bank's next policy meeting takes place on October 28.

The two releases should therefore clarify whether Bitcoin can keep advancing as the dollar presses its strongest run since June.