Bitcoin Holds Steady Above $118,000 After Strong Rally
Bitcoin (BTC) remains above $118,000 after gaining over 5% this week. The rise comes as traders expect the US Federal Reserve to cut interest rates on October 29. Institutional demand also supports the price. Bitcoin spot ETFs saw inflows for the third day in a row on Wednesday. Meanwhile, Japanese firm Metaplanet added 5,268 BTC to its holdings.
Macroeconomic Factors Boost Bitcoin Price
Bitcoin rose nearly 4% on Wednesday, closing above $118,500. The US government shutdown after Congress failed to pass a funding bill weakened the US Dollar. Bitcoin’s price often moves opposite to the dollar, which helped push BTC higher.
Private-sector jobs fell by 32,000 in September, the largest drop since March 2023, according to ADP data. August payrolls were also revised down. This weak jobs data increased expectations for two more Federal Reserve rate cuts by year-end. Traders see a 99% chance of a 25 basis point cut on October 29, according to CME Group’s FedWatch tool. This boosted market risk appetite and helped Bitcoin’s rally.
Institutional Demand and Exchange Reserves Impact Bitcoin
- Bitcoin spot ETFs recorded $675.81 million in inflows on Wednesday, marking three days of continuous inflows.
- Metaplanet increased its Bitcoin holdings to 30,823 BTC by buying 5,268 BTC on Wednesday.
- Bitcoin exchange reserves fell to 2.4 million BTC, the lowest since 2018, showing less selling pressure and reduced supply.
A lower exchange reserve often signals rising scarcity, which can support bullish price moves.
Bitcoin Price Outlook
Bitcoin started the week strong, rising nearly 2% on Monday and closing above the 50-day EMA at $113,764. After a slight dip on Tuesday, BTC gained almost 5% on Wednesday. It trades near $118,500 as of Thursday.
If Bitcoin keeps rising, it could test the $120,000 level. Breaking this could lead to gains toward the all-time high of $124,474. The Relative Strength Index (RSI) is 62, showing growing bullish momentum. The MACD indicator gave a buy signal on Wednesday, suggesting an upward trend.
If Bitcoin corrects, support lies near $116,000.
