Federal Reserve Policy and Bitcoin Market Response
The Federal Reserve Open Market Committee (FOMC) recently cut interest rates by 25 basis points, lowering the target Federal Funds rate to 3.75%-4%. This move was widely expected, and Matt Mena, a market analyst at 21Shares, noted it was “fully priced in,” which explains the muted initial reaction. Anyway, Bitcoin prices dropped about 2.4% after the announcement, as Federal Reserve Chair Jerome Powell revealed disagreements among FOMC members over a possible December cut. Michael Pearce, deputy chief US economist at Oxford Economics, pointed out that hawkish dissent from a regional Fed president signals growing contention, potentially restricting liquidity flows into crypto and other risk assets. On that note, historical data often shows rate cuts boosting risk assets, but pre-emptive pricing led to subdued moves this time. The crypto market saw a modest decline, with Bitcoin fighting to stay above key support levels. Over 56% of participants, according to CME Group data, anticipate further cuts to 3.5%-3.75% in December, reflecting ongoing uncertainty. Major banks like Bank of America, Citigroup, and Goldman Sachs predict at least two rate cuts in 2025, which could lift asset prices, though external issues like US-China trade tensions might offset gains.
Analysts have mixed views; some see the dip as a buying chance, while others warn of late-cycle fatigue and reduced aggressive buying. For instance, bullish takes highlight Bitcoin‘s strong November history, with gains in 8 of the last 12 years averaging 46.02%, suggesting a rebound is possible. Conversely, bearish outlooks stress the divided Fed and liquidity limits that could hinder price rises. Synthesizing this, the FOMC decision underscores Bitcoin’s sensitivity to macro policies, with the “priced in” cut leading to neutral short-term effects. Broader trends like institutional inflows and seasonal patterns support potential upside, but Fed indecision and global economic risks keep immediate impacts in check.
November has historically been one of Bitcoin’s best-performing months, with positive returns in 8 of the past 12 years, averaging 46.02% returns. Overall, we remain moderately risk-on and see a credible path for Bitcoin to break its all-time high before year-end.
Matt Mena
The unexpected hawkish dissent from a regional Fed president highlights that future moves are becoming more contentious.
Michael Pearce
Technical Analysis and Bitcoin Support Levels
Technical analysis offers key insights into Bitcoin’s price moves, with support and resistance levels guiding traders in volatile times. Currently, Bitcoin is struggling to hold above $112,000, a level seen as critical to avoid steeper drops. Liquidation heatmaps show dense orders near $107,000, hinting it could be a major pivot if tested. The Relative Strength Index (RSI) on short timeframes is in overbought territory, hitting 82.3 on the four-hour chart, which might signal upward momentum if resistance breaks. You know, trading data reveals seller dominance, as Hyblock’s cumulative volume delta shows steady pressure capping gains. Historical examples back this up: compression phases with higher lows and lower highs often precede big volatility spikes. Past breakouts led to price jumps of 35% to 44% in weeks, underscoring why these patterns matter. Analysts like Sam Price stress that a weekly close above $114,000 is needed to confirm bullish strength and prevent further falls.
Views vary widely; some focus on psychological barriers and RSI for entries, while others highlight weak buy volume as a risk. For example, Jelle’s bullish call predicts a 35% surge to $155,000 based on RSI, whereas Glassnode’s bearish view warns of corrections to $106,000 due to late-cycle exhaustion. This split shows why a combined approach using technical and on-chain data works better. Synthesizing this, technical analysis is vital for risk management and spotting short-term chances, but it shouldn’t stand alone. Bitcoin holding above $112,000 is key for bullish momentum, and a clean breakout past $118,000 could drive prices toward $120,000 or more, fitting historical trends where key levels trigger major shifts.
Bitcoin needs a weekly close above $114,000 to avoid a deeper correction and reaffirm bullish strength.
Sam Price
While I feel like the macro is solidly bullish and the top isn’t in yet, this currently feels more like a short term exit pump, than accumulation. Time will tell.
Material Indicators
Institutional and Retail Investor Sentiment
Investor sentiment from institutions and retail sectors shapes Bitcoin’s market, with different behaviors affecting stability and volatility. Institutions have shown steady involvement, with a net inflow of 159,107 BTC in Q2 2025 and spot Bitcoin ETFs seeing about 5.9k BTC inflows on September 10, the biggest daily jump since mid-July. This institutional support helps balance miner sales and retail swings, building a tougher market. Retail investors add crucial liquidity but can heighten short-term moves through emotional calls and leverage, as seen in recent long liquidations over $1 billion. Anyway, Binance‘s True Retail Longs and Shorts Account shows more long positions during dips, indicating underlying demand even in sell-offs. Institutional flows, like from MicroStrategy holding over 632,000 BTC, reinforce Bitcoin as a treasury asset and give fundamental backing. Historical trends suggest institutional inflows often lead recoveries, while retail activity amps up volatility, creating a mix where both are key for price discovery and risk control.
Behaviors contrast sharply; institutions aim for strategic, long-term buys, often defending supports like $110,000, whereas retail traders react to sentiment, boosting volatility. During the recent FOMC news, retail leverage worsened declines, but institutional buying eased sell-offs, pointing to healthy corrections rather than a bear turn. This dynamic highlights why watching both sides gives a fuller picture. Synthesizing this, the market gains from institutional steadiness and retail liquidity, aiding long-term price growth. As institutional adoption expands, possibly with broader financial products, the base for sustained gains strengthens, tying into Bitcoin’s evolution as a mainstream asset.
US spot Bitcoin ETFs saw net inflows of ~5.9k BTC on Sept. 10, the largest daily inflow since mid-July. This pushed weekly net flows positive, reflecting renewed ETF demand.
Glassnode
ETF inflows are almost nine times daily mining output.
Andre Dragosch
Expert Predictions and Market Outlook
Expert forecasts for Bitcoin’s future range widely, drawing on technical patterns, macro factors, and market trends. Bullish predictions include Jelle’s expectation of a 35% surge to $155,000 from RSI signals, and Timothy Peterson’s projection of $200,000 in 170 days based on past performance. These are backed by institutional inflows and favorable seasonality, with historical data showing October has strong gains since 2019, averaging 21.89% returns. On that note, bearish views from Glassnode analysts caution that bull markets may be in a late-cycle phase, suggesting sell-offs to $106,000 due to liquidation pressures and limited aggressive buying. Evidence from the Crypto Fear & Greed Index, now at ‘Neutral,’ reflects underlying uncertainty and the speculative nature of forecasting. Historical cases like past rate cuts boosting asset prices support bullish arguments, but current macro tensions, such as US-China trade issues, add risks that could curb optimism. For instance, Arthur Hayes has warned that global economic strains might lower risk appetite, possibly pushing Bitcoin to $100,000, showing how opinions diverge.
Outlooks clash without a clear winner; analysts weigh opportunities against dangers. Bullish cases emphasize Bitcoin’s fixed supply and growing use, while bearish ones focus on resistance levels and external economic pressures. This variety highlights the complexity of valuing volatile markets, where multiple factors must be considered for smart decisions. Synthesizing the outlook, it’s arguably true that the assessment leans cautiously optimistic, with institutional backing, historical rebounds, and seasonality hinting at upside. However, near-term risks and volatility temper this, reminding players to use risk strategies and weigh diverse views for a complete take on Bitcoin’s path.
When the Fed cuts rates within 2% of all time highs, the S&P 500 has risen an average of +14% in 12 months.
The Kobeissi Letter
Unless the market is kneecapped by something unexpected, Bitcoin will likely hit new highs before the end of the year, and that will fuel altcoins.
Pav Hundal
Bitcoin’s Role in Macroeconomic Context
Bitcoin’s link to macroeconomic factors has changed, with NYDIG research highlighting its shift to a “liquidity barometer” rather than a steady inflation hedge. According to Greg Cipolaro, Global Head of Research at NYDIG, Bitcoin has inconsistent ties to inflation, weakening its digital gold role. Instead, it shows a stronger inverse correlation with the US Dollar Index, rising when the dollar weakens, much like gold’s history. This change reflects Bitcoin’s deeper integration into traditional finance, where interest rates and money supply now drive its prices. Evidence from past data indicates Bitcoin usually gains from falling rates and expansionary policies, as lower costs for non-yielding assets and more liquidity support values. The 2020 rate cuts, for example, preceded big Bitcoin rises, matching patterns in traditional stores of value. However, the current scene of divided Fed policies and global economic strains, like US-China trade issues, brings volatility that can outweigh benefits. Comparative analysis with gold shows both react to dollar moves but aren’t correlated, serving complementary roles in portfolios.
Perspectives on Bitcoin’s macro role debate its main function; some investors still see it as an inflation hedge, while others stress its sensitivity to liquidity. This complexity means Bitcoin’s behavior blends traditional finance influences with its unique tech traits, requiring investors to adjust strategies as correlations evolve. Synthesizing this, Bitcoin’s maturation suggests it’s best viewed as a hedge against currency risk and global liquidity, not just inflation. As institutional adoption and regulations advance, Bitcoin’s ties to macro variables will likely tighten, guiding more refined investment approaches in the changing crypto world.
The community likes to pitch Bitcoin as an inflation hedge, but unfortunately, here, the data is just not strongly supportive of that argument.
Greg Cipolaro
Bitcoin also has an inverse correlation to the US dollar. While the relationship is a bit less consistent and newer than gold’s, the trend is there.
Greg Cipolaro
