A strong U.S. dollar and inflation concerns continue to weigh on Bitcoin. While today’s U.S. CPI release had little immediate impact on BTC, the recent string of stronger-than-expected labor market data has further pressured sentiment across the cryptocurrency market.

After falling by roughly 50% from its record highs reached in autumn 2025, Bitcoin now appears undervalued according to several key on-chain metrics, including those tracked by Grayscale. Although valuations have not yet reached the deeply discounted levels seen at previous cycle bottoms, there is no guarantee that this cycle will replicate past bear markets one-for-one.

Inflation and regulatory challenges in the U.S.

The regulatory outlook in the United States…