Bitcoin Price Forecast - BTC-USD Steadies at $120,959 After $126K Peak

Bitcoin (BTC-USD) Holds Above $120,000 as ETF Inflows Surge and Fed Turns Dovish

Bitcoin (BTC-USD) traded near $120,959, down 1.89% on Thursday, stabilizing after a volatile week that saw prices climb to a record $126,000 before profit-taking dragged it lower. Despite the modest retreat, the broader picture remains one of resilience, supported by a powerful combination of ETF inflows, monetary easing signals, and institutional accumulation. The $120,000 psychological level continues to serve as the pivot for traders assessing short-term momentum versus longer-term conviction.

Federal Reserve Shift Sparks Renewed Risk Appetite

The tone of the market shifted sharply following the release of the Federal Reserve’s September minutes, which revealed that nearly half of policymakers expect two rate cuts before year-end. This confirmed a dovish bias and triggered renewed appetite for risk assets — including equities, gold, and cryptocurrencies. The U.S. Dollar Index (DXY) slipped 0.62% to 99.53, while 10-year Treasury yields held at 4.15%, providing a supportive backdrop for speculative capital. Analysts described the Fed’s tone as “the confirmation crypto bulls needed,” as liquidity expectations shifted toward expansion rather than restraint.

ETF Inflows Accelerate: $4.8 Billion in Eight Days

Spot Bitcoin ETFs remain the core driver of BTC’s structural bid. Data from Farside Investors showed $4.8 billion in net inflows into U.S.-listed Bitcoin funds during the first eight days of October — an 8% jump in total assets under management. Wednesday alone saw $441 million enter spot Bitcoin ETFs, marking the eighth consecutive session of net inflows. Ether ETFs followed suit, attracting $69 million, signaling broad institutional risk appetite across digital assets. Market observers noted that ETF accumulation has now surpassed daily miner issuance by more than 400%, creating persistent supply absorption that cushions price corrections.

Macro Correlation: Gold, Dollar, and the Hard Asset Trade

Bitcoin’s correlation with gold (XAU/USD) has strengthened notably. Gold’s rally to $4,050 per ounce, up 11.7% in October and 55% year-to-date, underscores the global shift toward hard assets amid fiat erosion fears. Analysts highlight that the same macro thesis — protection against currency debasement and negative real yields — now fuels both gold and Bitcoin. The narrative of digital scarcity versus monetary dilution continues to define capital rotation patterns. Bitcoin’s 2025 year-to-date gain of 31% trails gold’s explosive run but remains exceptional compared to equities, where the S&P 500 advanced 35% over the same period.

Price Behavior: Tight Range Between $119,700 and $123,600

Thursday’s trading showed Bitcoin (BTC-USD) consolidating between $119,736 and $123,693, reflecting a brief breakdown below $120,000 on Bitstamp before quick recovery. Hourly trading volume spiked by 36% during the intraday selloff, suggesting short-term liquidation rather than structural selling. According to CoinGlass data, over $125 million in long positions were liquidated within 24 hours, mainly from overleveraged traders. Despite the volatility, BTC remains firmly supported by the 200-day EMA near $112,000, which now represents key structural support. A clean break above $126,000 could open the path toward the next resistance zone at $135,000–$138,000, while sustained closes below $119,500 risk triggering a correction toward $115,000.

Euphoria Phase and On-Chain Models Point Toward $180,000–$200,000

Several quantitative frameworks point to the market entering what analysts describe as the “euphoria phase.” The Cycle Master Model places Bitcoin’s “overvalued band” around $260,000, with a conservative peak near $180,000. Meanwhile, the MVRV ratio (Market Value to Realized Value) for short-term holders currently sits at 1.45, below the historical danger zone of 1.7 that has preceded cycle tops. This suggests upside remains before the cycle overheats. Historically, when MVRV crossed 1.7, BTC retraced 25–35% within months. Current readings indicate the market is heating but not yet unstable — a sign of early-to-mid euphoria rather than late-stage mania.

Institutional and Corporate Demand Reinforce Long-Term Structure

Institutional confidence in BTC-USD continues to deepen. Corporate advocates like MicroStrategy’s Michael Saylor emphasize that ETF inflows now absorb more coins daily than miners produce — a dynamic unseen in any prior cycle. At the same time, new sovereign adoption signals, such as Luxembourg’s Wealth Fund confirming its first direct Bitcoin allocation, amplify the legitimacy narrative. Institutional exposure is expected to double by 2028, according to State Street Research, highlighting a growing base of sticky demand. The Fear and Greed Index rose from 34 (Fear) to 58 (Neutral) this week, marking the highest sentiment shift since May, when BTC first broke $100,000.

Halving Mechanics, Supply Compression, and Miner Discipline

The 2024 halving, which cut the block subsidy from 6.25 to 3.125 BTC, has intensified supply discipline. Miner revenues, offset by higher transaction fees from Ordinals and L2 activity, have stabilized even as hash rate expansion slowed. The global hash rate remains near 672 EH/s, while miner balances dropped by 4,300 BTC since September, signaling continued selling restraint. This pattern mirrors post-halving behavior in 2020, when prices consolidated before an explosive leg higher. Analysts argue that the ongoing ETF-driven demand shock combined with disciplined miner supply creates a compression pattern likely to propel BTC’s next leg above $150,000.

Government Shutdown, Dollar Strength, and Short-Term Pressure

The ongoing U.S. government shutdown, now stretching into its second week, injects uncertainty into near-term macro flows. The delay in key economic data releases complicates policy calibration for the Fed and keeps liquidity sentiment fragile. The Dollar Index rose 1% over the week, testing Bitcoin’s role as a debasement hedge. Yet, analysts view this as temporary friction. As Treasury liquidity programs resume and rate cuts materialize, the dollar’s strength is expected to fade — a catalyst that typically recharges Bitcoin’s momentum.

Derivative Markets: Volatility Compression and $600M Liquidations

The derivatives complex is flashing short-term exhaustion but longer-term strength. Total open interest across major exchanges sits near $26.8 billion, down 8% from the previous week as leveraged longs were flushed out. $600 million in liquidations over two sessions reset excessive leverage ratios. Funding rates, which peaked near 0.15%, have cooled to 0.06%, restoring balance between longs and shorts. This cleansing process typically precedes major directional moves — a pattern seen before breakouts in both 2021 and 2024.

Altcoin Correlation: ETH, XRP, and Solana Follow BTC’s Lead

Bitcoin’s dominance climbed to 59.2%, its highest since late 2021, underscoring its gravitational influence. Ethereum (ETH-USD) slipped 4.06% to $4,321, XRP (XRP-USD) dropped 3.90% to $2.79, and Solana (SOL-USD) fell 4.28% to $218.07. Analysts note that the correction in altcoins reflects capital rotation toward Bitcoin’s relative safety rather than broad market exit. Historically, BTC dominance surges in the late stages of rallies before rotating back to altcoins once volatility stabilizes.

Technical Map: Momentum Intact, But Resistance Thickens at $126K

Technical readings remain constructive. BTC-USD holds above its 20-day EMA ($118,400) and 50-day EMA ($113,200), while the RSI has cooled from overbought 73 to a neutral 58, signaling room for renewed upside. The MACD histogram remains positive, though momentum bars have flattened, confirming short-term consolidation. The $120,000–$123,000 corridor now acts as a reaccumulation zone; sustained closes above $126,000 would confirm breakout continuity toward $138,000–$142,000, while failure to defend $119,500 opens a retracement window to $112,000 support.

Forward Outlook and Market Sentiment

Macro tailwinds remain aligned for Bitcoin’s mid-term strength. Rate-cut expectations, ETF inflows, constrained supply, and institutional adoption form a confluence rarely seen in prior cycles. Yet, traders remain cautious amid signs of “early euphoria,” elevated funding, and psychological resistance near prior peaks. The overarching thesis — digital scarcity in an era of policy excess — remains intact. As long as Bitcoin sustains above $119,000–$120,000, structural support holds, and the probability of a rally toward $150,000–$180,000 into early 2026 remains high.

Verdict: Based on ETF absorption, dovish monetary trajectory, and sustained on-chain accumulation, BTC-USD remains a BUY on dips. Support stands firm at $119,000, resistance sits near $126,000, and the cycle roadmap points to an extended advance toward $150,000–$180,000 before topping risks emerge.

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