The US Dollar Index (DXY) is on track for its strongest month since June, gaining nearly 2% in September as hawkish Federal Reserve signals supported the greenback. DXY reached 101.61 on September 29, its highest level since late July, and traded near 101.4 on Wednesday. Barchart said the index was also approaching its highest close since April 2025. The dollar’s strength typically pressures Bitcoin, which has historically moved inversely to the currency, but Bitcoin has risen 6.14% this month despite September’s average 2.42% loss. The move followed a quarter-point Fed rate increase on September 16 and continued signals that further tightening remains possible. Fed Governor Michael Barr said more increases will likely be needed to return inflation to target, while New York Fed President John Williams said another hike may be appropriate late this year. Elevated oil prices amid deadlocked US-Iran talks and a 30-year Treasury yield at its highest level since 2002 are adding to inflation concerns. Bitcoin has also produced two technical signals associated with recoveries in earlier cycles: its first weekly close above the 50-week moving average since November 2025 on September 20, and a September 8 golden cross after 293 days below its 200-day average. Galaxy’s Alex Thorn said similar moving-average reclaims historically indicated bear-market lows, while Binance Research noted that comparable golden crosses preceded stronger rallies but cautioned that its sample was small. October has historically been Bitcoin’s strongest month by median return, with gains in 10 of 13 years, an average return of 19.92%, and a median return of 14.71%. Traders next await Wednesday’s Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, followed by Friday’s monthly jobs report. Hot data could revive expectations for an October rate hike, which had recently fallen to roughly even odds. The Fed’s next policy meeting is scheduled for October 28, making the two economic releases important tests of whether Bitcoin can continue rising if the dollar extends its strongest run since June.