Low oil prices, weak dollar, Bank of Japan hints at interest rate cuts: Bitcoin's path to $150,000 becomes easier

Bitcoin (BTC)’s recent correction from its all-time high of $126,100 to current levels of around $104,500 may be masking a more constructive macro environment that could accelerate the path towards the $150,000 goal.

Although the derivatives market suffered a historic deleveraging that wiped out $19 billion in futures open interest, several macro trends are aligned to support the next rally in cryptocurrencies.

The Fed's dovish turn, a weak dollar, a record rally for gold to $4,300, and a possible policy shift from the Bank of Japan create the backdrop for Bitcoin to potentially break above $130,000, a key resistance level that 21Shares' Matt Mena sees as a gateway to $150,000.

A weak dollar opens the door

The dollar index (DXY) fell 0.5% this week from October 14th to October 16th, creating favorable conditions for risk assets.

A weak dollar typically provides a tailwind for Bitcoin through global liquidity channels, and continued DXY slippage often coincides with strength in spot demand and narrowing ETF discounts.

The Fed's expectations for lower long-term interest rates are further supporting this movement by lowering real yields and the dollar, easing financial conditions and supporting ETF inflows.

This month's FOMC meeting has emerged as a potential catalyst, but overly dovish positioning could create a “buy the rumor, sell the news” dynamic.

Manufacturing data is important because continued weakness in price indicators creates uncertainty in the rate path, and Bitcoin typically remains range-bound until the data skew becomes clearly dovish.

Furthermore, the rise in gold prices to record highs above $4,300 reinforces the degrading narrative that Bitcoin supporters have long championed.

Institutions that view Bitcoin as “digital gold” may add to positions based on relative value, but risk managers often allocate to bullion before rotating into crypto beta, which can lag flows.

The precious metal's rally confirms concerns about currency weakness and monetary policy that could ultimately impact Bitcoin demand, especially as institutional investors seek to diversify their portfolios against traditional financial assets.

Bank of Japan's policy change creates tailwind

The Bank of Japan’s (BoJ) hawkish signals present both opportunities and risks for Bitcoin. While the rapid appreciation of the yen has historically forced deleveraging across “long-term” technology and crypto assets, the gradual normalization process has proven less disruptive.

More importantly, the Bank of Japan's interest rate hike will narrow the difference in interest rates between Japan and the U.S., potentially leading to further depreciation of the dollar.

This dynamic would benefit risk assets such as Bitcoin by improving global liquidity conditions and reducing the dollar's attractiveness as a funding currency.

Technical reset creates opportunities

While the recent stress in derivatives markets has been painful, it has removed the excessive leverage that had previously limited Bitcoin's upside potential.

Glassnode data reveals the magnitude of this reset across multiple metrics.

Breaking down the futures market, more than $10 billion in notional positions were wiped out in a single day, comparable to the liquidations in May 2021 and the FTX unwind in 2022.

This historic deleveraging event de-leveraged the entire system, reducing systemic risk and creating a more stable market structure.

The funding rate has fallen to a level not seen since the FTX bankruptcy in late 2022, and the annualized funding amount has temporarily turned significantly negative.

Such extreme cash resets have historically coincided with the peak of fear and the final stages of deleveraging, often setting the stage for a healthier recovery phase.

Estimated leverage ratios have fallen to multi-month lows following a sharp contraction in futures open interest. This structural reset removes a major obstacle to sustained price growth by reducing the likelihood of chain liquidations in future upswings.

Long-term holders continue to distribute, reducing supply by approximately 300,000 BTC since July 2025.

This continued seller-side pressure highlights the risk of demand depletion, and the market is likely to enter a correction phase before new accumulation begins.

Furthermore, the ETF's flows have weakened along with price fluctuations, with cumulative net flows turning negative by 2,300 BTC as of October 15th. However, the current moderation suggests hesitation rather than panic, and is in contrast to previous capitulation phases, where outflows typically accelerated as prices fell.

The main resistance lies at the $117,100 level, with 5% of supply currently in the loss. Consistently exceeding this threshold could build momentum toward Mena's interim goal of $130,000 and accelerate its timeline to reach $150,000.

However, the risk remains. Gradually rising oil prices could accelerate inflation again and dampen expectations for interest rate cuts. Robust North American housing and earnings data may encourage the Fed to remain cautious and limit upside if real yields rise.

A sharp rebound in the dollar would reverse the current favorable situation.

On your way to $150,000, you'll need to monitor a few important variables. If the dollar continues to fall while real yields fall, the path of least resistance for cryptocurrencies will continue to be higher.