BTC price eyes record monthly close: 5 things to know in Bitcoin this week

Bitcoin (BTC) has rebounded to $114,500, positioning for a potential record monthly close, though market sentiment remains divided despite the recovery. This upward movement is occurring amid expectations of a 0.25% Federal Reserve interest rate cut this week and progress on a US-China trade deal, both factors contributing to broader risk-on sentiment. AI models project BTC could reach $125,000 by the end of October, while short-term holders have returned to profitability, signaling renewed positive momentum.

Analysis

Bitcoin (BTC) has rebounded to $114,500, reclaiming its 21-week EMA and targeting a record monthly close, with AI models projecting $125,000. However, market sentiment is mixed, with some traders noting low volume and bearish divergences on the RSI.

Significant macroeconomic tailwinds include a highly anticipated 0.25% Federal Reserve interest rate cut and progress on a US-China trade deal. These factors have already boosted the S&P 500 by $3 trillion, fostering a risk-on environment beneficial for cryptocurrencies.

On-chain data shows short-term holders are profitable (cost basis near $113,000, SOPR > 1). Yet, CryptoQuant research suggests potential corrections as overall supply in profit approaches 95% (currently 81%). Technical warnings persist if BTC breaks below $109,000.

Despite avoiding a "red" October, BTC's 1% gain is well below the historical 20% average. Upcoming corporate earnings from major tech firms could introduce volatility, reflecting the "neutral" Crypto Fear & Greed Index.

Key Decisions for Investors

• Investors should closely monitor Bitcoin's key technical levels, particularly the $109,000 support, given warnings of potential bearish reversal setups and mixed market sentiment.
• Assess the broader market's reaction to the anticipated Federal Reserve rate cut and US-China trade deal, as these macro tailwinds could further influence risk asset performance, including BTC.
• Exercise caution regarding potential short-term corrections, as CryptoQuant data suggests historical precedent for pullbacks when short-term holder profitability approaches 95%.
• Be prepared for increased market volatility stemming from upcoming major corporate earnings reports, which could impact overall market sentiment and Bitcoin's price trajectory.