Bitcoin Surges Above $118,000 on ETF Inflows and Softer USD

Bitcoin breakout: what moved the market

Bitcoin rallied more than 5% and traded above $118,000 after a wave of spot ETF inflows and growing expectations for U.S. rate cuts. Spot Bitcoin ETFs recorded roughly $675.8 million in inflows for the third consecutive day, exchange reserves fell to about 2.4 million BTC (the lowest since 2018), and large institutional buyers — including a reported Metaplanet purchase of 5,268 BTC — added to the bullish narrative. At the same time, a softer USD backdrop following weak private payroll data and rising Fed-cut probabilities supported risk assets.

Macro drivers: USD weakness and Fed pricing

ADP reported -32,000 private jobs for September and payroll revisions were trimmed, increasing market expectations for Fed easing. CME FedWatch pricing now implies a very high probability of multiple rate cuts by year-end, pressuring the dollar and creating liquidity tailwinds for BTC and other risk assets. The DXY plunge has traded lower into the week, amplifying inflows into crypto and precious metals.

On-chain and flows: why institutional demand matters

Spot ETF inflows and institutional demand are meaningful because they can remove supply from exchanges and reduce immediate sell pressure. Daily inflows north of $600 million and a large single purchase increase the odds that the market can sustain higher levels, especially while exchange reserves are at multiyear lows. That concentration of buying has been a primary driver of the recent breakout above key resistance bands.

Technical picture: levels to watch

Technically, BTC closed the session above $118,500 with a daily RSI near 62 and a bullish MACD crossover — encouraging short-term momentum. Immediate resistance sits around $120,000; a decisive break and hold above that level would open the path toward the prior record around $124,474. On the downside, a loss of momentum could trigger a pullback to daily support near $116,000, which would be an important level for buyers to defend.

Risks and catalysts

Key risks that could reverse the current move include a sudden rebuild of exchange reserves if inflows slow, stronger-than-expected US labor or inflation data that reprice Fed cuts and strengthen the USD, or rapid profit-taking after the fast rally. Traders should also note elevated short-term positioning and the amplified volatility that comes with momentum-driven moves — leveraged participants are especially exposed. A shift toward ETF outflows would materially change the supply-demand balance.

Trading ideas and risk management

For traders looking to participate, here are practical approaches:

- Momentum play: consider stacking small position sizes on successful intraday break-and-hold above $120,000 with tight stops below the breakout candle. - Pullback entry: use a measured dip toward $116,000–$117,000 to add exposure, watching volumes and orderflow for confirmation. - Hedged exposure: pair a long spot or derivatives position with defined-risk hedges (e.g., options or smaller inverse positions) to manage tail risk. - Position sizing: reduce leverage and use stop-losses given the potential for rapid reversals on macro surprises.

Execution and automation

Many traders use algorithmic rules to implement disciplined entries, scaling and stops — particularly in volatile rallies. Automated setups can help enforce risk limits and reduce emotional decision-making during fast markets. For traders executing on exchanges, consider using dedicated execution tools and reliable monitoring; professional solutions such as the Bitcoin Trading Bot can help implement those rules consistently.

Quick checklist for traders

- Confirm macro drivers (Fed pricing, USD direction). - Monitor ETF inflows and exchange reserves for supply-side signals. - Use technical confirmation on break or pullback levels ($120k resistance, $116k support). - Manage leverage and set predefined stop-loss levels. - Consider automating repetitive execution tasks to reduce slippage and emotional errors.

Conclusion

Bitcoin's move above $118,000 is supported by strong ETF inflows, institutional accumulation and a softer USD backdrop driven by weak labor prints and growing Fed-cut expectations. While momentum and on-chain signals favor further upside toward $120,000 and possibly a retest of the all-time high, traders must remain vigilant for pullbacks and macro reversals. Combining a disciplined plan with automated trading tools can improve execution and risk control in this environment.

If you want to test systematic execution and disciplined risk management, explore the automation options at PlayOnBit. You can try the Trade Assistant Bot to run rules-based entries and exits. Whether you focus on crypto trading or pair crypto with forex trading signals, automated trading tools can help you apply strategy consistently.