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- Bitcoin holds above $110,000 as traders watch for a possible short squeeze that could lift prices toward $118,000–$120,000.
- U.S. inflation data this week may shape market sentiment, with a lower CPI reading likely to boost Bitcoin and other risk assets.
Bitcoin began the new week with a small recovery after the recent market crash. The price moved above $111,000, giving traders hope that the coin could make another run toward $118,000 or even $120,000.
Still, many market participants are unsure if this move can last, or if it is just a short-term bounce before another pullback. Here are key factors that may shape the market direction.
Bitcoin Tries to Stay Strong Above $110,000
First, Bitcoin showed some strength as trading opened in Asia, rising from weekend lows around $108,000 to over $111,000. Buyers seemed to be stepping back in after a difficult start to the month when prices dropped to $102,000 on Binance. The move gave some relief to holders who had been waiting for signs of recovery.
Traders are now focused on the price zone between $116,000 and $117,000. Charts show many short positions sitting in that range. If Bitcoin pushes into that area, it could trigger what traders call a short squeeze, which might lift prices higher. Analyst CrypNuevo pointed out that this cluster could become the next big test for the market.
Secondly, market watcher Ted Pillows said Bitcoin could rise further if global tension between the United States and China continues to ease. For context, as noted in our earlier post, Trump’s 100% China tariff announcement rattled global crypto markets. Consequently, crypto analyst Ted marked $112,000 as an important level that the coin needs to stay above to keep its upward move going.
Meanwhile, not everyone is convinced. Trader Roman said that the latest rise came with weaker trading volume, which could mean there is not enough strength behind it. He also warned that Bitcoin has not yet filled the large wick down to $102,000 from earlier this month, which could pull prices back down before another strong move higher.
As of writing, the coin was changing hands for $108,006, down 2.71% in 24 hours.
Inflation Report and Market Mood in Focus
Thirdly, attention this week is turning to the U.S. Consumer Price Index report, which will be released on October 24. It will be released even though the government remains shut down. This report is watched closely because it shows how prices are rising and may influence what the Federal Reserve does with interest rates.
Per this outlook, if inflation comes in lower than expected, it could give Bitcoin a short-term lift by raising hopes for a rate cut later this month. In addition to this, we detailed in our recent news brief that long-term Bitcoin holders show strong conviction as selling pressure stays low around $111,000.
In addition, data from CryptoQuant shows that traders are slowly adding leverage again after the large wave of liquidations earlier in October. This suggests that some confidence is returning, though most are still being careful.
Lastly, Bitcoin dominance is being watched closely as it is indicative of what happens next for the entire ecosystem. For now, Bitcoin is holding steady above $110,000. If buyers can keep control, a push toward $118,000 or even $120,000 could happen. However, if pressure builds again, the market could slip back and test the $102,000 level once more.
Meanwhile, outside the current price talks, as highlighted in our recent publication, Japan’s Financial Services Agency is considering a plan that would let banks invest in and hold cryptocurrencies such as Bitcoin.
