Bitcoin (BTC) has notched a 1% gain in the past 24 hours and currently sits above $113,000, but the token remains in consolidation as the market seems indecisive despite the latest positive macroeconomic news.
Last week, Bitcoin-linked exchange-traded funds (ETFs) bled out nearly $900 million as investors seem to have either taken some profits off the table or rotated to more exotic corners of the market – e.g. altcoins and meme coins.
However, this week has started with a strong note as BTC ETFs received $500 million on Monday, making up for more than half of what they lost last week in a single day.
Is this an early sign that buyers are coming back to the market?
Lower Rates Favor a Bullish Long-Term Outlook
In the past 10 days, we have had two major cascade liquidations. The first took place on September 21, as nearly $3 billion worth of long positions were wiped out as BTC dropped from $115,000 to $112,000.
Crypto Liquidations (Last 6 Months) – Source: CoinGlass
Just three days later, another $1.1 billion was flushed out as BTC dropped even further, below the $110,000 psychological and technical support.
Despite these drops, market conditions remain quite favorable as the Federal Reserve recently cut interest rates by 25 basis points – the first cut of this year.
Meanwhile, analysts expect another cut during the October FOMC meeting. Data from FedWatch shows that 93% of economists surveyed see another 25 basis points happening next month.
Lower rates favor a bullish outlook for Bitcoin and for cryptos as a whole, as investors are progressively forced to take higher risks to get better yields.
On Friday, the market will digest employment data for September about U.S. non-farm payrolls. These figures should probably confirm analysts’ views about the Fed’s interest rate decision.
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See all Bitcoin forecastsBTC Eyes $120K Upon Bouncing Off Key Support
Open interest (OI) remains quite high for BTC, indicating that bullish sentiment persists. It is quite difficult to see this as a sign that short positions have supplanted long ones despite the latest retreat, as the top crypto is trading just 9% away from its latest all-time high.
BTC/USD Daily Chart (Coinbase) – Source: TradingView
Looking at the daily chart, we can see some ongoing consolidation between $109K and $120K – a 9% range that offers traders some wiggle room to make some short-term profits before the next directional move.
BTC remains above its 200-day exponential moving average (EMA), meaning that the long-term outlook is still positive. Meanwhile, the key support to watch sits at $108,000. A drop below this mark could result in a deeper correction to $105K.
On the other hand, if the token rallies once again, a spike above $120,000 could result in a move toward $145,000 or even $160,000 by using the magnitude of the last two upticks as a reference to estimate the asset’s future upside potential.
The Relative Strength Index (RSI) has sent an early buy signal upon crossing the 14-day moving average. The oscillator currently stands at 50. If it climbs to 60, that would increase the odds of a rally, as it means that positive momentum is gaining traction.