The Dollar Is Having Its Best Month Since June, and Bitcoin Hasn't Blinked Yet

The US Dollar Index (DXY) is heading for its best month since June. The index has gained nearly 2% in September amid hawkish Federal Reserve signals.

This tends to weigh on Bitcoin (BTC), yet the largest cryptocurrency has gained 6.14% this month. It now heads into October, historically its strongest month by median return.

What Put the Muscle Behind the Dollar's Best Month Since June

DXY rose to 101.61 on September 29, its highest level since late July. It traded near 101.4 on Wednesday. Barchart said the DXY is also closing in on its highest close since April 2025.

The rally reflects a hawkish turn at the Fed, which raised rates by a quarter point on September 16. Since then, officials have kept further tightening in play.

Fed Governor Michael Barr said additional increases will likely be needed to bring inflation back to target. New York Fed President John Williams said one more hike may be appropriate late this year.

Energy costs feed the same inflation worry that keeps the Fed hawkish. Oil prices remain elevated with US-Iran talks deadlocked. Meanwhile, the 30-year Treasury yield recently hit its highest level since 2002.

Bitcoin has historically moved inversely to the dollar, so a firmer greenback tends to pressure its price. Its gain this month has also bucked the calendar, as September has averaged a 2.42% loss.