Bitcoin reached a new milestone by surging past $116,000, marking a 3% daily gain amidst the backdrop of the U.S. government shutdown – its first since 2018. Despite the political impasse over health-care funding resulting in 750,000 federal workers being placed on furlough, risk assets displayed resilience as they shrugged off initial concerns.
The cryptocurrency market saw an overall increase of 3% in its total market cap, reaching $4.09 trillion. Bitcoin led the charge, with its dominance climbing from 57% to 59%. Analysts note that such a market structure tends to lead to more sustainable rallies compared to those led by altcoins.
While gold soared to new heights near $3,875–$3,895 per ounce, signaling a flight-to-safety sentiment, Bitcoin’s quick rebound from $112,000 in just two days indicates that investors perceive macro uncertainty as a buying opportunity rather than a cause for concern.
Fueling Bitcoin’s rally were significant inflows into U.S. spot Bitcoin ETFs, totaling $3.53 billion in net inflows for the month of September. Leading institutions such as BlackRock, Ark, and Fidelity contributed to this influx of capital. On-chain and derivatives data also paint a positive picture, with leverage resetting, funding levels stabilizing, and open interest remaining steady, allowing Bitcoin to resume its upward trajectory.
Technical analysts point to a multi-week bull flag pattern emerging, with the price currently testing the upper boundary. This pattern often precedes significant upward movements in Bitcoin’s price. Additionally, historical trends show that October, also known as “Uptober,” tends to exhibit strong performance following a positive September close.
Moreover, Telegram founder Pavel Durov has reignited long-term optimism by reiterating his belief in Bitcoin’s potential to reach $1 million. This bullish outlook is driven by Bitcoin’s fixed supply in contrast to the continuous money printing by governments, a sentiment commonly observed during mid-cycle expansions.
Looking ahead, key resistance levels for Bitcoin are around $117,500, with a clear break above this level potentially opening the doors to $119,300–$120,300 and a psychological target of $120,000. On the downside, support levels are identified at $114,800–$115,200 and $112,000, with a larger liquidity pocket at $107,000–$108,000 in case of further downward movement.
In conclusion, analysts such as MN van de Poppe, Ted Pillows, and Daan Crypto Trades advocate for holding above $112,000, breaking past $117,500, and riding the momentum towards new highs as we enter the fourth quarter of the year. The cover image is credited to ChatGPT, while the BTCUSD chart is sourced from Tradingview.