Bitcoin's $110,000 Target Boosted by Dollar Weakness, Inflation Fears

Bitcoin has maintained a steady price range over the past six days, with fluctuations under 3%. This stability has led traders to consider the potential for a breakout, particularly as the US dollar's strength wanes. The US dollar's movement is a key factor, but other elements must align for Bitcoin to reach $110,000.

Historical data shows periods where Bitcoin and the US dollar have moved in the same direction. For instance, from August 2024 to April 2025, Bitcoin showed strength while the DXY index climbed from 100 to 110, and weakened as the US dollar retraced to 104. This indicates that a weaker dollar alone may not be sufficient to explain a potential Bitcoin bull run, as both assets have shown concurrent strength in recent history.

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

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. This could lead to a broad-based price step-up, as sellers begin adjusting to higher landed costs.

Bitcoin 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.

While not directly tied to Bitcoin itself, the potential addition of Strategy to the S&P 500 index is viewed by some as a secondary driver. If included, a significant amount of passive capital may begin chasing Bitcoin.

In summary, 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.