BTC traders still bullish despite the price pullback: Check forecast

Bitcoin is experiencing a slight pullback to approximately $121,600 after hitting a new all-time high of $126,000, with leading altcoins also correcting. This follows robust institutional demand, evidenced by $2.72 billion in inflows into spot Bitcoin ETFs this week. Despite the current dip, traders maintain a bullish outlook, anticipating a potential surge past $150,000 by month-end, driven by significant call option activity and the high probability of a Federal Reserve rate cut; however, a failure to defend the $120,000 support level could lead to further declines towards $116,000.

Analysis

Bitcoin (BTC) is currently experiencing a slight pullback, trading around $121,600 after reaching a new all-time high of $126,000 earlier this week, and is retesting the critical $120,000 support level. Leading altcoins like Ethereum (ETH) and XRP have also corrected, closing below their key support levels, with technical indicators such as the 4-hour RSI (48) and MACD suggesting a potential bearish bias if the $120,000 support fails.

Despite this short-term correction, underlying market sentiment remains moderately positive, driven by robust institutional demand for spot Bitcoin ETFs, which recorded $2.72 billion in inflows this week. This significant capital allocation suggests institutional investors view BTC as a digital hedge, reinforcing its long-term value proposition.

Traders maintain an optimistic outlook, with Dr. Sean Dawson noting a large cluster of BTC call options at $128K and $145K strikes for the October 31 expiry, pointing to potential for a $150K+ move. Implied volatilities across various expiries have surged to 30-day highs, indicating anticipation of significant price action, further supported by a near-certain 25 basis point Federal Reserve rate cut later this month.

Key Decisions for Investors

• Monitor BTC's ability to hold the $120,000 support level, as a sustained breach could lead to further declines towards $116,000.
• Consider the strong institutional inflows into spot Bitcoin ETFs ($2.72 billion) as a bullish long-term signal, indicating sustained demand and Bitcoin's role as a digital hedge.
• Evaluate the potential for significant upside, given the concentration of call options targeting $150K+ and surging implied volatility, especially in anticipation of a Federal Reserve rate cut.
• Exercise caution with altcoin exposure, particularly for ETH and ETHE, which have corrected below key support levels and exhibit negative per-ticker sentiment.