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- Bitcoin remains above its 21-week EMA, showing sustained bullish structure, and is ready for further gains after the major leverage reset.
- Delays in U.S. inflation data due to the government shutdown shift focus to Fed policy signals for potential rate cuts that can aid the BTC rally.
Following last Friday’s crypto market crash that triggered over $19 billion in single-day liquidations, Bitcoin (BTC) and the broader crypto market are showing signs of recovery. BTC price has regained $115,000 as of press time, as market experts see further upside as the largest crypto starts catching up with M2 Money supply. Let’s look at the five potential catalysts that could drive BTC price higher.
BTC Rebounds Along With Broader Crypto Market
The broader cryptocurrency market staged a strong recovery, adding more than $500 billion to its market cap from Friday’s lows. As a result, even BTC has bounced back more than 6% from the lows and is currently flirting with $115K levels.
A single tariff announcement in the ongoing U.S.-China trade dispute was enough to trigger widespread market panic, as mentioned in our previous story.. Stocks and commodities saw sharp volatility, though gold quickly rebounded, hitting a new all-time high of $4,078 per ounce by Monday.
Crypto analyst Ted Pillows said Bitcoin (BTC) may be poised for a major rebound after last week’s market reset. He noted that BTC has recently underperformed compared to the global M2 money supply but suggested the correction has likely run its course.
According to Pillows, Bitcoin could begin catching up with global liquidity trends. As a result, he projected a potential rally toward $150,000 by the end of Q4.
Bitcoin Liquidity Clusters and Trendline to Watch
Crypto analyst Ted Pillows highlighted two key Bitcoin (BTC) liquidity clusters currently shaping market dynamics. According to Pillows, the first cluster lies between the $109,000–$113,000 range, while the second is positioned between $117,000–$121,000.
He noted that while U.S. stock futures opened in positive territory, lingering uncertainty around the ongoing U.S.–China trade resolution continues to influence investor sentiment across global markets. Pillows added:
“If US-China talks go well in the coming days, Bitcoin could definitely sweep the upside liquidity. Otherwise, we could see some more long liquidations before reversal”.
Crypto analyst Rekt Capital noted that Bitcoin (BTC) continues to hold firmly above its 21-week Exponential Moving Average (EMA), a key technical support level. The analyst highlighted that BTC has been consistently forming higher candle-bodied lows. This suggests sustained bullish momentum and strengthening market structure.
A Cautious Take After Massive Liquidity Reset
The shock from last week’s liquidity cascade has triggered one of the largest market resets in crypto history. According to the latest data from on-chain analytics firm Glassnode, funding rates across derivatives exchanges have plunged to bear-market levels. In a message on the X platform, Glassnode noted:
“Funding rates across the crypto market have plunged to their lowest levels since the depths of the 2022 bear market. This marks one of the most severe leverage resets in crypto history, a clear sign of how aggressively speculative excess has been flushed from the system.”
Data from CoinGlass supports this trend, showing that open interest (OI) dropped by over $20 billion between Friday and Sunday before rebounding from $69 billion to $74 billion.
US Shutdown Puts Pressure on Fed Rate Cut Announcement
Two key U.S. inflation reports are expected to be delayed this week due to the ongoing US government shutdown. The September readings for the Consumer Price Index (CPI) and Producer Price Index (PPI), along with initial jobless claims data, were scheduled for release on Thursday but may now be postponed.
With economic data releases on hold, investor focus is shifting to comments from senior Federal Reserve officials. Markets will closely monitor Fed Chair Jerome Powell’s remarks on “Economic Outlook and Monetary Policy” and look for hints of any further rate cuts.
According to the CME Group’s FedWatch Tool, traders remain nearly unanimous in expecting a 25-basis-point rate cut at the Fed’s next meeting on October 29.
Bitcoin Can Benefit From the Debasement Trade
Despite recent market volatility, analysts suggest that crypto and other risk assets could be entering the early stages of a broader uptrend, driven by growing skepticism toward the U.S. dollar and traditional fiat currencies.
Bitcoin’s ongoing bull market has been closely tied to what many call the “debasement trade”, marking a global shift toward assets that hedge against currency devaluation. “Bitcoin started moving out to record highs in 2024, which has taken Bitcoin as high as $125,000,” Mosaic Asset Company noted.
