Back
October 3, 2025

Bitcoin Surges Past $118,000 as ETF Inflows and Fed‑Cut Bets Weaken the Dollar

Market snapshot: BTC breaks higher amid USD weakness

Bitcoin rallied more than 5% to trade above $118,000, closing daily sessions above $118,500 with a daily RSI near 62 and a bullish MACD crossover. Spot bitcoin ETFs recorded roughly $675.8 million of inflows for the third consecutive day (ETF flows accelerate), institutional players (including Metaplanet) added sizeable positions — Metaplanet bought 5,268 BTC — and exchange reserves have fallen to approximately 2.4 million BTC, the lowest level since 2018. On the macro side, a weak ADP print (-32,000 private jobs in September) and downward payroll revisions pushed CME FedWatch pricing toward an implied >99% chance of two Fed cuts by year‑end, pressuring the US dollar and supporting risk assets (USD weakness).

What moved the market

Two drivers stand out:

1) Large ETF and institutional flows

Consecutive multi‑hundred‑million dollar inflows into spot bitcoin ETFs are increasing buy‑side liquidity and tightening available floating supply as exchange reserves decline. That flow dynamic is a primary technical and structural tailwind for BTC in the near term.

2) Macro: softer US labor signals and Fed‑cut probability

Weaker US jobs data (ADP) and revised payrolls reduced rate‑tightening pressure on markets, boosting the probability of Fed cuts. A softer dollar (DXY near the week’s trough) improves local currency returns for international investors and tends to amplify moves in crypto and other risk assets.

Technical outlook and key levels

Short‑term momentum is bullish but not without friction. Traders should watch these levels:

- Immediate resistance: $120,000. A clear break and hold above this level would increase the odds of a run toward the all‑time high near $124,474.
- Near‑term support: $116,000. A pullback to this area would be a normal momentum retracement; failure to hold could invite deeper selling.
- Indicators: daily RSI ~62 and a bullish MACD crossover support continuation, but elevated short‑term positioning raises volatility risk.

Risks and scenario planning

Key risks to monitor:

- Reversal of Fed‑cut expectations: stronger US labor or inflation prints would lift the dollar and could trigger profit‑taking in BTC.
- Flow dynamics: ETF inflows may slow or institutional buyers could pause, and exchange balances might rebuild if selling resumes (ETF outflows mount).

- Technical pullback: rapid moves often prompt short‑term corrections toward defined support zones. For traders focused on liquidations and failed moves, see analysis of breakout failures.

Trading ideas and risk management

For active traders and longer‑term holders alike, consider a plan that blends directional exposure with strict risk controls:

  • Buy‑the‑dip approach: scale into positions on pullbacks toward $116,000 with staggered entries and predefined stop‑losses.
  • Breakout play: consider adding on a confirmed daily close above $120,000 with volume confirmation and a trailing stop to protect gains.
  • Position sizing: due to heightened volatility, keep single‑trade exposure conservative and use stop‑losses sized to account for intraday noise.

Retail traders can increase discipline and execution consistency by incorporating automated trading rules and algorithmic entry/exit logic. Tools such as a Bitcoin Trading Bot can help automate position sizing, trailing stops and time‑based scaling. If you trade across asset classes, combining crypto strategies with a Trade Assistant Bot can streamline multi‑market risk management and execution.

Context: seasonality and cross‑market signals

October has historically been a strong month for bitcoin (gains in 10 of the last 12 Octobers), which supports the seasonal narrative. At the same time, watch macro calendar risks (including central bank speeches and US fiscal developments) that could quickly alter risk sentiment. For example, upcoming high‑volatility events such as central bank commentary can tighten liquidity and create abrupt moves in both crypto and forex markets.

Conclusion

Bitcoin’s move above $118,000 reflects a combination of structural ETF demand, institutional accumulation and softer US macro data that has increased Fed‑cut odds and pressured the dollar. While the path to $120,000 and a retest of the record high is open, traders should respect short‑term volatility and use disciplined risk management. Automated trading and systematic rules can help capture opportunities while limiting downside—especially in fast‑moving markets.

Keywords: AI trading bot, crypto trading, forex trading, automated trading.