Bitcoin has maintained a narrow trading range since Wednesday, marking six straight days of price movements within 3%, signaling a rare phase of low volatility in the market.
Traders are now weighing whether external economic forces, particularly a weakening U.S. dollar and emerging inflation pressures, could spark a breakout past the $110,000 level.
U.S. Dollar Weakness May Not Be Enough
While some analysts point to a potential inverse relationship between the U.S. dollar and Bitcoin prices, history suggests the connection is not always consistent.
From August 2024 to April 2025, Bitcoin showed strength even as the U.S. Dollar Index (DXY) rose from 100 to 110.
When the DXY later dipped to 104, Bitcoin also declined, undercutting the theory that a weaker dollar alone could push BTC higher.
The U.S. economy remains central to global output, accounting for 26% of it.
Yet nearly half of the Nasdaq 100 companies derive revenue from international sources, meaning a weaker dollar can inflate their earnings, boosting risk-on sentiment.
This climate could make Bitcoin more appealing to investors rotating capital out of traditional assets.
Risk Appetite and Inflation Could Drive Upside
Bitcoin is still viewed by many as a risk-on asset.
With the Nasdaq 100 reaching record highs on June 30, market confidence appears robust.
This could lead to a shift from fixed income into more speculative assets like cryptocurrencies.
Rising inflation expectations are also entering the spotlight.
The U.S. Personal Consumption Expenditures (PCE) Price Index stayed under 2.3% between March and May, following a period of inflation above the Federal Reserve’s target.
But that trend could reverse.
In April, the U.S. imposed 10% import tariffs that are now starting to be reflected in consumer prices.
“What we’re seeing in June is the first broad-based price step-up, as sellers begin adjusting to higher landed costs,” said Karthik Bettadapura, CEO of DataWeave.
Even if Bitcoin’s direct correlation with inflation remains unclear, the asset has historically been marketed as a hedge against rising prices.
Its 114% gain in 2024 occurred despite relatively tame inflation, showing that price surges may be influenced by more than just macroeconomic data.
Strategy’s S&P 500 Inclusion Could Spark Further Gains
Another potential catalyst is the possible inclusion of MicroStrategy (Strategy) in the S&P 500.
Joe Burnett of Semler Scientific remarked, “If included, a tsunami of passive capital will begin chasing Bitcoin.”
The firm holds significant Bitcoin reserves, and its index inclusion could indirectly boost BTC demand.
Bitcoin’s potential surge past $110,000 may ultimately hinge on multiple converging forces: improving investor sentiment, inflationary pressures, and greater institutional exposure via entities like Strategy.
If these elements align, BTC could soon break out of its holding pattern.