Bitcoin's nemesis, the Dollar Index, is on the verge of a major breakout

Bitcoin $BTC$63,888.86 and the Dollar Index (DXY) are moving in opposite directions, with the latter on the verge of a major move that may embolden crypto bears.

The largest cryptocurrency is under pressure for a third straight day, trading near $63,900 and down nearly 1% since midnight UTC. The broader market is mostly showing similar losses, with the exception of a few tokens such as HASH, XLM and ENA, which gained 7% or more.

The Dollar Index, which tracks the U.S. currency's value against major fiat currencies, has gained 0.26% to 100.66, extending Wednesday‘s 0.8% rise. What’s notable is that the index is now on the verge of firmly breaking out of a 13-month-long trading range.

This type of setup usually leads to more momentum chasing by traders, resulting in further gains. Strength in the greenback typically weighs on dollar-denominated assets such as bitcoin.

$BTC has historically tended to move in the opposite direction to the dollar. Its 90-day correlation coefficient with the DXY was recently minus 0.82.

The greenback is clearly benefiting from the hawkish tone struck by the Fed on Wednesday, which has raised concerns interest rates may rise in the U.S. Should it continue to gain ground, $BTC is likely to remain under pressure and potentially revisit the pivotal 200-week simple moving average at $62,258.

Economists at crypto exchange Kraken told CoinDesk that dips below that average have historically produced a median return of over 100% in one and three years. Other analysts, meanwhile, anticipate a deeper selloff on a potential break below the average. Stay alert!

Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk's “Crypto Week Ahead.”

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