While Bitcoin (BTC) recently dipped from its peak of $126,100 to around $104,500, the bigger picture could be quite positive, potentially speeding up its journey to even higher values.
Although the derivatives market experienced a significant shakeup with $19 billion wiped out in futures open interest, several global economic factors seem to be aligning in a way that could push crypto prices higher.
Specifically, the U.S. Federal Reserve hinting at a more relaxed monetary policy, a weaker U.S. dollar, gold reaching a record high of $4,300, and possible changes in the Bank of Japan’s policies create an environment where Bitcoin could break through the crucial $130,000 resistance level. According to Matt Mena at 21Shares, surpassing that point is “the gateway to $150,000.”
Dollar’s Dip Opens Opportunities
The Dollar Index (DXY) has decreased by 0.5% during the week of October 14-16, creating more favorable circumstances for investments that carry a bit more risk.
A weaker dollar often helps Bitcoin, as it improves global liquidity. Historically, when the DXY weakens, demand for Bitcoin on the spot market tends to increase, and discounts on Bitcoin ETFs become smaller.
Expectations that the Federal Reserve will keep interest rates low further support this trend, lowering real yields and the dollar’s value, easing financial conditions, and encouraging inflows into ETFs.
The upcoming meeting of the Federal Open Market Committee (FOMC) this month could act as a catalyst. However, if investors become too optimistic beforehand, there could be a “buy the rumor, sell the news” scenario.
Manufacturing data is crucial. If this data continues to show weakness while prices remain stubbornly high, it will create uncertainty about the future path of interest rates. This will likely keep Bitcoin within a certain price range until the data clearly points toward a more relaxed monetary policy.
Moreover, gold’s record-breaking surge above $4,300 reinforces the idea of currency devaluation, something Bitcoin supporters have long emphasized.
Institutions that view Bitcoin as “digital gold” may increase their holdings based on its relative value. However, these investments could take time, as risk managers often allocate funds to gold first before moving to crypto assets.
The rally in precious metals validates concerns about currency depreciation and monetary policy, potentially boosting demand for Bitcoin, especially as institutional investors look for ways to diversify their portfolios away from traditional financial assets.
Bank of Japan’s Policy Shift Provides Assistance
The Bank of Japan’s (BoJ) signals of a potential shift in policy present both opportunities and challenges for Bitcoin. While a rapid increase in the yen’s value has historically forced investors to reduce their exposure to technology and crypto assets, a more gradual adjustment would likely be less disruptive.
More importantly, if the BoJ raises interest rates, it could further weaken the dollar by reducing the difference in interest rates between Japan and the United States.
This scenario would benefit riskier assets like Bitcoin by improving global liquidity and making the dollar less attractive as a funding currency.
Technical Reset Creates New Opportunities
The recent turmoil in the derivatives market, while unpleasant, has eliminated excessive leverage that was previously limiting Bitcoin’s potential upside.
Data from Glassnode illustrates the extent of this correction across various metrics.
The futures market experienced a significant drop, with over $10 billion in notional positions being erased in a single day. This is similar to the liquidations seen in May 2021 and the collapse of FTX in 2022.
This significant deleveraging event has removed excessive risk from the system, creating a more stable market structure.
Funding rates have plummeted to levels not seen since the FTX collapse in late 2022, with annualized funding briefly turning sharply negative.
Such extreme funding resets have historically coincided with maximum fear and the final stages of deleveraging, often paving the way for healthier recovery periods.
The Estimated Leverage Ratio has fallen to multi-month lows following the sharp decline in futures open interest. This structural change eliminates a key obstacle to sustained price increases by reducing the chance of cascading liquidations during future rallies.
Long-term holders are continuing to sell, with the supply they hold decreasing by approximately 300,000 BTC since July 2025.
This ongoing selling pressure highlights the risk of demand exhaustion, suggesting that the market may enter a period of consolidation before renewed accumulation begins.
Additionally, ETF inflows have weakened alongside price decreases, with cumulative net flow turning negative by 2,300 BTC as of October 15. However, the current slowdown suggests caution rather than panic, contrasting with previous capitulation phases where outflows typically accelerated alongside price declines.
Key resistance is located at the $117,100 level, where 5% of the Bitcoin supply is currently at a loss. A sustained break above this threshold would likely trigger momentum toward Mena’s intermediate target of $130,000, potentially accelerating the timeline for reaching $150,000.
However, risks remain. Rising oil prices could reignite inflation and dampen expectations for interest rate cuts. Stronger housing and earnings data in North America might keep the Federal Reserve cautious, limiting potential upside if real yields increase.
Any sharp rebound in the dollar would reverse the current favorable conditions.
Reaching $150,000 depends on monitoring several key variables. If the dollar continues to weaken while real yields ease, Bitcoin’s most likely path remains upward.
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