Bitcoin is unchanged on Thursday after easing back from its record high of 126.1 K reached earlier in the week. Modest losses are seen across the crypto space with Ethereum and Ripple trading -2.4% and -1.7% lower, respectively, while Solana is gaining 1.1% The total cryptocurrency market cap is down 0.7% over the past 24 hours, to $4.17 trillion.
Bitcoin kicked off the week on a positive note, rising to 126.1k, a fresh record high. However, faced rejection here, falling 2.6% on Tuesday as some holders booked profits. BTC continues to consolidate around 122k as the market awaits a fresh catalyst.
The seasonally strong month of October hasn’t disappointed so far. BTC has booked gains of almost 8% so far, boosted by expectations of Fed rate cuts, strong institutional demand, and whale accumulation. However, the recent rally in the USD has weighed on BTC in recent sessions.
Macro Backdrop Is Supportive, USD Strength Is a Headwind
The minutes to the September Fed meeting revealed that the majority of policymakers saw scope to reduce interest rates further. However, some warned against cutting rates too aggressively, given lingering inflation. The market is pricing in two more 25-basis-point rate cuts this year.
Meanwhile, the USD’s strength this week has provided a headwind for BTC. The USD has risen to a two-month high versus its major peers, boosted by weakness in the EUR and , due to political and fiscal situations in France and Japan.
With the US government shutdown continuing for an eighth day, US economic data remains in short supply, meaning the market lacks alternative catalysts and data that could drag on the USD. While the USD continues to strengthen, BTC may struggle to rebound to fresh record highs.
Institutional Demand Soars in October
That said, institutional demand remains supportive. According to SoSo data, BTC ETFs recorded $440.7 million in inflows on Wednesday, marking an eight-day streak of inflows. BTC ETF net inflows this week have reached $2.52 billion, putting inflows for October to date at $4.81 billion. Persistent ETF demand could help BTC rise higher.
Profit-Taking Activity Remains Limited
Profit-taking activity remains relatively low. According to CryptoQuant, the total net realized profit of BTC holders across the past 30 days is at 0.26 million BTC, this is 50% below July’s peak of 0.53 million BTC and well below the levels seen in March and December 2024.
Given the supportive macro backdrop and solid institutional demand and limited profit taking the outlook for BTC remains bullish above 120k.
Bitcoin Technical Analysis
After surging over 10% last week and reaching an ATH of 126.1k, BTC has eased lower and is consolidating around 122k, pulling the RSI out of overbought territory. This isn’t necessarily out of the ordinary for BTC, after the first test of 120k also led to a pullback, as did 110k. Whether BTC can gain acceptance at 125k depends on how aggressive bulls are prepared to be.
Buyers would need to successfully defend 120k to extend gains back up towards 125k and 126.1k for fresh record highs.
A break below 120k brings 117.9k, the September high, into focus, and below here 110k. A break below 110k is needed to create a lower low.
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