What to Know:
- Bitcoin briefly surpassed $116,000 as traders anticipate a dovish Federal Reserve decision.
- Digital asset products experienced a reversal in flows, with $921 million in net inflows reported.
- The Mt. Gox trustee extended the creditor repayment deadline, easing supply-side pressure.
Bitcoin (BTC) momentarily exceeded $116,000, a level not seen in two weeks, as investors anticipate a more accommodating stance from the Federal Reserve and capital returns to digital assets. This surge reflects a blend of macroeconomic factors and technical movements, shifting market sentiment after a risk-averse period in October. The convergence of these elements has made the market ripe for short squeezes and renewed institutional interest.
The market is closely watching the upcoming Fed meeting on October 29, with many expecting it to be a catalyst for further gains. Traders are wagering that more relaxed financial conditions will provide a boost to risk assets, including cryptocurrencies. Concurrently, a weaker dollar and stable long-term yields on U.S. Treasury notes are creating an environment typically conducive to crypto rallies.
Digital asset products are seeing a resurgence, with CoinShares reporting substantial net inflows. This reversal comes after cooler CPI data, reigniting institutional interest following outflows in October. This shift explains the conviction among dip-buyers who view levels below $115,000 as buying opportunities.
Easing supply-side pressures are also playing a role, as the Mt. Gox trustee has extended the creditor repayment deadline by a year. This move alleviates near-term concerns about forced selling, which had been weighing on market sentiment. The formal extension removes a variable that traders had identified as a potential obstacle.
Despite these positive trends, it’s important to remain vigilant about potential risks. The same ETF and fund cohort that showed buying interest this week were net sellers in mid-October, and Fed messaging can quickly alter risk sentiment. The upcoming Fed decision will be a critical test of whether the current market positioning will hold or unwind.
Source: Original article
