Market analysis firm Swissblock has identified the strengthening US dollar as the most significant risk facing Bitcoin, outweighing even direct sell-offs. In a new report, the company highlighted that a large portion of Bitcoin’s past bear markets coincided with periods when the US Dollar Index (DXY) rebounded from its lows and entered a sustained uptrend.
Dollar strength reduces liquidity and risk appetite. Analysts emphasized that a strong dollar tightens financial conditions globally, drying up the cheap money that often flows into risk assets. “At first, the dollar decline looked supportive for BTC. But the reversal changed everything,” Swissblock noted, referring to the DXY’s bounce from its January low of 95.6 to above 101 this week, a gain of 5.6%. As the dollar climbed, liquidity tightened, selling pressure intensified, and Bitcoin’s market structure deteriorated. Temporary price recoveries in April and early May were dismissed as relief rallies that failed to resolve underlying macroeconomic headwinds.
Additional pressure from long-term holders. Galaxy Research reported that on-chain distribution by Bitcoin holders of five years or more has overwhelmed institutional absorption over the last four weeks. CryptoQuant analyst Darkfost described this as “the most significant OG selling in Bitcoin’s history.” This supply overhang, combined with dollar strength, has kept bears in control.
Macro outlook remains decisive. Swissblock stressed that for Bitcoin to stage a sustainable recovery, the upward momentum of the US dollar must weaken. Future Federal Reserve monetary policy decisions, inflation data, and DXY movements will likely continue to dictate Bitcoin’s price trajectory. Analyst Benjamin Cowen added that BTC is caught between the Bear Market Resistance Band and the 200-week moving average, suggesting a possible market cycle bottom later in 2026.
