3 Reasons Bitcoin Struggles To Overcome Each New Overhead...

Bitcoin’s momentum loss continues as long-term holders add to market selling pressure, and rising US dollar strength leads investors to reduce their exposure to risk.

Dormant Bitcoin holders moving large sums to exchanges raises concerns about long-term confidence amid growing concerns about the potential impact of quantum computing.

Bitcoin (BTC) has repeatedly struggled to maintain prices above $106,000 since early November, despite the S&P 500 sitting 1% below a new all-time high. Meanwhile, gold, the traditional store of value, has pared its recent losses and now trades just 4% below its prior record of $4,380.

Many traders say that factors unique to the cryptocurrency industry may be affecting Bitcoin’s performance, but are these serious enough to keep BTC from reaching $112,000 again?

The recent strengthening of the US Dollar Index (DXY) against a basket of major currencies reflects renewed confidence in the US Treasury’s ability to manage its fiscal challenges. When investors fear stagnating growth amid persistent inflation — a scenario often described as stagflation — the domestic currency typically weakens, as monetary expansion becomes unavoidable.

For that reason, traders often highlight the long-standing inverse correlation between the DXY and Bitcoin’s price. By contrast, the US stock market tends to benefit from a stronger dollar and lower interest rates. Reduced borrowing costs lift corporate valuations, while favorable exchange rates make imported goods more affordable when priced in the local currency.

Companies pursuing Bitcoin reserve strategies, such as Strategy (MSTR) and Metaplanet (MTPLF), have previously been among the largest corporate buyers, especially when their shares traded at a premium to their underlying assets. The mNAV multiple captures this relationship, representing the value of the Bitcoin held relative to the company’s enterprise valuation.

The recent downturn in the cryptocurrency market has largely erased this advantage, removing the incentive for companies to issue additional shares. At current price levels, any new issuance would dilute existing shareholders, making it an unattractive option without a meaningful mNAV premium.

These companies can still raise funds through debt or convertible notes, but such financing is typically less beneficial for investors. Debt holders often demand collateral, which effectively reduces the amount of Bitcoin factored into a company’s enterprise value; thereby limiting pot

Source: CoinTelegraph