Bitcoin (BTC) briefly topped $116,000 for the first time in two weeks as traders looked forward to a dovish Federal Reserve decision and the October risk-off stretch saw new money flow back into digital asset products.
At the time of writing, Bitcoin is trading at $114,683.03, up 0.15% in 24 hours. The move reflects a convergence of macro tailwinds and technical dynamics that changed sentiment after mid-October weakness left the market vulnerable to a short squeeze and new institutional demand.
The market is pricing in the Fed meeting on October 29th as the trigger. Traders expect easing financial conditions to support risk assets.
Additionally, the dollar index (DXY) has been weakening in the low 98% range, and the long-term yield on the 10-year U.S. Treasury bond has been restrained at nearly 4%, creating the macro backdrop that cryptocurrencies typically need to rally.
Lower interest rates reduce the opportunity cost of holding non-yielding assets and broadly ease financial conditions.
Performance of major altcoins was mixed. Ethereum fell 0.2% in 24 hours to trade at $4,148.13, while Solana fell 0.1% to $199.82. XRP rose 0.1% to $2.64 and BNB rose 0.5% to $1,143.17.
Cardano fell 1.3% to $0.6725, while Dogecoin fell 1.5% to $0.2026. This discrepancy suggests that funds are concentrated in Bitcoin rather than rotating broadly across crypto markets.
Reversing the trend in digital asset products
CoinShares reported net inflows into digital asset products of $921 million in the most recent week.
The reversal comes as consumer price index (CPI) data cools and financial institutions' investment appetite picks up after continued capital outflows in October. This change explains why bull buyers showed confidence this week and treated the sub-$115,000 level as an entry point rather than resistance.
The derivatives market amplified this movement. CoinGlass estimates that hundreds of millions of dollars in short-term liquidations occurred over the weekend and into early October 27 as bears were forced to exit positions when Bitcoin cleared a key technical level.
This squeeze dynamic increased spot demand and accelerated the rally once resistance broke, creating momentum that pushed BTC toward $116,000.
The pressure on the supply side was eased just at the last minute. Mt Gox's administrators have extended the deadline for repayments to creditors by one year to October 31, 2026, eliminating the risk of a forced sale in the near term due to an overhang that has weighed on prices in recent months.
The formal extension is set out in the administrator's notice and will alleviate one of the variables traders cited as headwinds.
Despite recent tailwinds, two risks remain. The same cohort of ETFs and funds we bought this week were net shorts in mid-October, and the Fed's message could quickly reverse risk sentiment.
The macro tailwinds supporting Bitcoin could just as quickly turn into headwinds if the chances of a rate cut fade or the dollar soars. The Fed's decisions this week will test whether today's positioning holds or eases.
