Key Takeaways
- •Bitcoin experienced significant upside volatility, surpassing $112,000 resistance as the weekly close approached.
- •Traders are anticipating further recovery and potential new local highs for the BTC price.
- •The US Federal Reserve is widely expected to implement another interest rate cut next week.
Bitcoin Price Action and Trader Sentiment
Bitcoin (BTC) challenged the $112,000 mark heading into Sunday's weekly close, with traders expressing optimism for new local highs. Data from Cointelegraph Markets Pro and TradingView showed that Bitcoin's price action had been range-bound over the weekend.
A notable rebound on Friday helped bulls push the price to a higher level within the week's trading range, bolstered by favorable US inflation data. This positive momentum has led market participants to foresee the emergence of fresh price highs, especially considering the increased volatility often seen around the weekly close.
Trader Crypto Caesar highlighted the retesting of the $112,000 resistance level on Sunday.
"A clean break and close above it could confirm a bullish continuation toward $123K," Crypto Caesar stated in a post on X, linking to an accompanying chart.
Crypto investor and entrepreneur Ted Pillows shared a similar outlook, observing a short-term uptrend in BTC.
"$BTC seems to be in a short-term uptrend. Four consecutive green daily candles, which means someone is consistently TWAPing Bitcoin here," Pillows told his X followers. He added, "I'm still eyeing a $112,000-$114,000 zone, as a reclaim could push BTC above $118,000 really soon."
The X analytics account, referencing economist Frank Fetter, indicated it was "watching" for a break above $113,000. This level, the account noted, represents the current aggregate cost basis for Bitcoin's short-term holders—those holding for up to six months. The analysis suggested that if BTC can reclaim this short-term holder cost basis at $113,000, a move into the "blue band" of $130,000 to $144,000 would be a likely outcome.
Federal Reserve Rate Cut Expectations Boost Risk Assets
The upcoming week holds a significant event for investors in cryptocurrency and other risk assets: the US Federal Reserve's monetary policy meeting.
Following recent inflation data that came in cooler than expected, the Federal Reserve is widely anticipated to cut interest rates by 0.25% at its meeting scheduled for October 29. Data from CME Group's FedWatch Tool indicated that the probability of this rate cut stood at over 98% at the time of reporting.
The trading resource The Kobeissi Letter commented on the broader context of global monetary policy, noting that the Fed's potential cut is part of a worldwide "pivot" by central banks toward easing. According to their analysis, 82% of global central banks have reduced rates in the past six months, the highest proportion since 2020. The letter stated, "Global monetary easing is in full swing," emphasizing that central banks this century have only slashed rates at such a pace during recessionary periods.
