Bitcoin Faces Selling Pressure as US Dollar Index Declines

Bitcoin's price has been under scrutiny as the US Dollar Index experiences a significant decline, raising concerns about the cryptocurrency's potential to fall below $100,000. Analysts suggest that Bitcoin is facing selling pressure, which could temporarily push its price below this critical threshold. This selling pressure is exacerbated by long-term holders liquidating their assets, contributing to a supply overhang that prevents Bitcoin from maintaining prices above $100,000.

The cryptocurrency market has seen a dip, with Bitcoin trading near $107,000. Investors are closely monitoring the U.S. tariff deadline, which could influence market sentiment and price movements. Ethereum, another major cryptocurrency, has also experienced a fall, adding to the overall market volatility.

Despite the recent price fluctuations, Bitcoin has shown resilience, steadily recovering from a dip below $100,000 earlier this month. Exchange flows indicate a declining supply, with balances across major venues dropping to a five-year low. This trend is driven by institutional demand, as evidenced by the surge in ETF inflows. Over the past three weeks, U.S.-listed Bitcoin spot ETFs absorbed over $4.63 billion in net inflows, signaling a sharp return of institutional interest. This influx of capital has become a significant structural force in the market, draining supply from exchanges and fueling Bitcoin's price recovery.

The technical analysis points to an increasingly crowded short cluster between $109,500 and $111,200. With every rejection at $110,000, shorts are refueling, setting up a high-risk short squeeze scenario. A breakout above $110,500 could trigger an explosive rally toward $118,000–$120,000, as stop orders cascade. The ascending triangle pattern on the 4-hour chart, along with strong support near $107,200 and a bullish RSI near 65, confirms this coiling pattern.

While derivatives volumes saw a 45% drop in the last 24 hours, on-chain metrics signal long-term confidence. The Money Flow Index (MFI) remains above 50, showing no sign of panic exits. Bitcoin’s exchange outflows signal a medium-term supply shock, especially as institutional ETFs pull real BTC off exchanges. Funding rates remain positive but not overheated, with open interest climbing 8% in 48 hours, indicating smart money behavior during quiet accumulation phases.

The macroeconomic backdrop strengthens the case for Bitcoin. The recent PCE report showed a drop in personal spending, reinforcing expectations for a Q3 Fed rate cut, now priced in with 91.4% certainty. This dovish outlook, combined with easing geopolitical tensions, is fueling broader risk appetite. Bitcoin's correlation with the Global Liquidity Index remains strong, and its inverse correlation with the U.S. dollar continues to support upside.

Global demand for Bitcoin is expanding, with sovereign entities and retail inflows surging. Beyond U.S. ETF activity, regions are seeing increased interest in cryptocurrencies. For instance, Bolivia saw a 530% spike in crypto transactions amid currency devaluation. BlackRock is exploring ETF exposure beyond BTC and ETH, evaluating Cardano (ADA), Solana (SOL), and Polkadot (DOT).

In conclusion, Bitcoin is coiled under critical resistance while ETF demand drains supply, short interest stacks, and macro tailwinds accelerate. With ETF flows surpassing $2.2 billion weekly and institutional conviction deepening, the breakout setup is strong. A confirmed close above $110,500 would trigger a BUY, with first targets at $118,000, followed by a possible move to $130,000. Risk remains contained above $104,000. The market structure, liquidity profile, and global demand narrative all reinforce a bullish thesis.