Bitcoin Retest of $120,000 Is ‘Within Sight’: Bitbank
News Summary
Bitbank analyst Yuya Hasegawa suggests a Bitcoin retest of $120,000 is "within sight," driven by persistent risk-on sentiment following the Federal Reserve's recent interest rate cut, its first in nine months. Improved technical sentiment is seen as a tailwind, with a successful break above $120,000 potentially leading to a full retracement. Despite bullish technicals, Bitcoin options flows indicate traders are selling premium and capping upside between $125K-$150K, reflecting range-bound positioning rather than aggressive directional bets. The CME FedWatch Tool shows 92% of traders anticipate another 25-basis point Fed cut in October. Traders are keenly awaiting remarks from Fed Chair Jerome Powell and Vice Chair Michelle Bowman, along with upcoming consumer spending data, for further clues.
Background
The U.S. Federal Reserve (the Fed) is the central bank of the United States, responsible for setting monetary policy, including managing interest rates. Interest rate decisions have significant implications for financial markets, particularly for riskier assets like cryptocurrencies. Rate cuts typically reduce the attractiveness of holding cash and encourage investors to seek higher-yielding assets, thus boosting risk-on sentiment. In 2025, during incumbent US President Donald J. Trump's administration, the Fed's first rate cut signals a potential shift towards an easing monetary cycle, contrasting with previous tightening efforts to combat inflation. Bitcoin, as a volatile asset, often sees its price movements influenced by such macroeconomic signals and liquidity conditions.
In-Depth AI Insights
Is the long-term impact of the Fed's rate-cutting cycle on Bitcoin being underestimated by the market? - The market appears overly focused on short-term technicals and predicted rate cut numbers, but the true impact of a rate-cutting cycle lies in its structural shift in global liquidity and risk appetite. - Persistent Fed rate cuts under the Trump administration could signal a broader trend of global central bank easing, providing long-term support for Bitcoin beyond just a "risk asset" to a potential hedge against fiat currency devaluation. - Investors should be wary of over-interpreting dovish stances, as inflationary pressures could resurface during economic recovery, forcing the Fed to tighten again at some point, thereby interrupting Bitcoin's upward momentum. What deeper insights do Bitcoin options hedging behaviors reveal? - Options traders selling premium and capping upside suggest caution regarding explosive short-term Bitcoin price increases, preferring to capture time value within a specific range rather than betting on strong directional moves. - This "range-bound positioning and carry harvesting" strategy likely reflects institutional hedging against macroeconomic uncertainties, even in an easing environment, where concerns about a stronger dollar and rising bond yields could suppress risk assets. - It also implies that the market views $125,000 to $150,000 as a psychological resistance level for the current phase, with a short-term breakout requiring stronger fundamental catalysts beyond just rate cut expectations. How will macroeconomic policies under President Donald J. Trump's administration shape the cryptocurrency market? - During President Trump's second term, his administration may favor economic growth through fiscal stimulus and tax cuts, potentially synergizing with the Fed's loose monetary policy to jointly fuel inflation expectations and enhance risk asset appeal. - However, Trump's protectionist trade policies and stance on the dollar could introduce additional macroeconomic uncertainty, especially if trade frictions with major partners (like China) escalate, potentially increasing global market volatility and impacting short-term crypto performance. - Furthermore, the regulatory stance on cryptocurrencies under the Trump administration might remain relatively ambiguous or volatile, presenting both opportunities and risks for the market. Investors should closely monitor policy directions, rather than relying solely on monetary policy signals.