A strengthening US dollar poses a greater threat to Bitcoin than selling pressure, according to analysts at Swissblock. A strong dollar could limit the influx of liquidity into the crypto market and curb further growth in the leading cryptocurrency, the experts believe.

Many previous bearish periods in the Bitcoin market have coincided with periods of recovery in the US Dollar Index (DXY) and the dollar's transition to sustained growth. Swissblock analysts noted that a strengthening US dollar typically puts pressure on risky assets, including cryptocurrencies.

Experts believe that the weakening dollar in recent months contributed to the rise of the leading cryptocurrency, but the situation changed after the DXY reversed. Under these conditions, liquidity in financial markets is shrinking, and investors are becoming more risk-averse.

Analysts also recalled the market dynamics in the spring: Bitcoin's rise in April and early May resembled more a recovery from a decline than the beginning of a full-fledged bullish cycle. This growth proved insufficient to change the overall economic picture.

Swissblock believes that the world's leading cryptocurrency's return to a sustainable uptrend will largely depend on a weakening dollar. In the coming months, decisions by the US Federal Reserve, US inflation data, and the dynamics of the DXY index will be crucial for Bitcoin.

Earlier, experts at market maker Wintermute stated that Bitcoin's recent rise should be viewed as a technical rebound after a deep correction. According to them, key market indicators do not yet confirm the start of a new bullish cycle, and large investors continue to reduce their positions in the world's leading cryptocurrency.

A stronger dollar could hinder Bitcoin's growth — Swissblock