Bitcoin holds steady as major catalysts align for breakout above $110K

Key takeaways:

• Bitcoin’s price could surge as investors shift from fixed income to risk-on assets like crypto.

• Inflation concerns and Strategy’s potential S&P 500 entry may boost Bitcoin’s momentum.

Bitcoin (BTC) has remained within a tight range since Wednesday, marking six consecutive days with price fluctuations under 3%. This unusually low volatility has prompted traders to speculate whether a breakout could be influenced by a weakening US dollar, particularly as the country’s fiscal position continues to deteriorate.

While the US dollar’s movement draws attention, other key factors must align for Bitcoin to hit $110,000.

Although many point to an inverse correlation between US dollar strength and Bitcoin’s price movements, historical data shows periods of similar directional trends. One such example occurred from August 2024 to April 2025.

Over those eight months, Bitcoin showed strength while the DXY index climbed from 100 to 110, and weakened as the US dollar retraced to 104. This suggests that relying solely on a weaker dollar to explain a potential Bitcoin bull run lacks a solid basis, as both assets have shown concurrent strength in recent history.

The US economy remains a dominant force, accounting for 26% of global output. However, 46% of the Nasdaq 100 companies’ revenues come from international markets, according to Global Investment Research. A weaker DXY index tends to benefit those companies, as their foreign income becomes more valuable when converted back into US dollars.

Will Bitcoin benefit from inflation, capital rotation, and S&P 500 rebalancing?

Many investors still classify Bitcoin as a risk-on asset rather than a fully uncorrelated financial alternative. With the Nasdaq 100 reaching an all-time high on June 30, investor confidence is rising, encouraging some to rotate out of fixed income and into higher-risk assets, potentially including Bitcoin.

Another possible catalyst for Bitcoin surpassing $110,000 is the reemergence of inflationary pressures. The US Personal Consumption Expenditures Price Index stayed below 2.3% from March through May, following a five-month stretch of inflation running above the Federal Reserve’s target.

The 10% import tariffs imposed by the US in April are gradually being passed on to consumers as supply chains adjust. Karthik Bettadapura, co-founder and CEO of DataWeave, told Yahoo Finance: “What we’re seeing in June is the first broad-based price step-up, as sellers begin adjusting to higher landed costs.”

Whether or not Bitcoin’s correlation with consumer prices holds, the cryptocurrency has long been promoted as an inflation hedge, especially during the 2021 bull run. Bitcoin is often described as digital gold, but its 114% gain in 2024 shows that price rallies can occur even in a low-inflation environment.

Related: Strategy buys $531M of Bitcoin as sentiment rebounds above $107K

While not directly tied to Bitcoin itself, the potential addition of Strategy (MSTR) to the S&P 500 index is viewed by some as a secondary driver. Joe Burnett, Director at Semler Scientific, claimed that “if included, a tsunami of passive capital will begin chasing Bitcoin.”

In the end, Bitcoin’s potential climb above $110,000 could be powered by multiple forces: A stronger risk appetite following record highs in equities, renewed inflation concerns, and Strategy’s possible S&P 500 inclusion—all of which may converge to create favorable momentum for BTC price.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.