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October 6, 2025

Bitcoin Surges Past $118,000 as ETF Inflows and Fed‑Cut Bets Weigh on USD

Overview: Bitcoin strength backed by institutional flows and softer US data

Bitcoin rallied more than 5% to trade above $118,000, closing near $118,500 on the daily chart after a bullish MACD crossover and a daily RSI around 62. The move coincided with renewed USD weakness: ADP reported -32,000 private jobs in September and the US jobs release was delayed, pushing CME FedWatch pricing to imply better than 99% odds of two Fed cuts by year‑end. Spot Bitcoin ETFs recorded approximately $675.81M of inflows (the third consecutive day of significant inflows), while exchange reserves fell to about 2.4M BTC — the lowest level since 2018.

Why this matters

The convergence of large institutional ETF flows, declining exchange inventories and a softer dollar creates a favorable backdrop for risk assets. Institutional buyers such as Metaplanet (reported 5,268 BTC purchased) increase bid-side liquidity and reduce immediate sell pressure. At the same time, market expectations of Fed easing typically weaken the dollar (DXY), improving the case for dollar‑denominated assets like BTC to rally. See prior examples of record ETF inflows that drove BTC to new highs.

Technical picture: levels to watch

Key technical reference points for BTCUSD:

  • Immediate resistance: $120,000 (psychological and short‑term supply zone).
  • Near-term support: $116,000 (daily support / pullback level).
  • Bull case target: retest of the all‑time high near $124,474 if BTC decisively breaks and holds above $120,000.
  • Indicators: daily RSI ~62 (room to run but not overbought); bullish MACD crossover on the daily.

Macro drivers and cross‑market signals

Macro flow notes traders should monitor:

  • US data and Fed expectations: Weaker jobs prints and the paused BLS release increased Fed‑cut pricing — further soft data could keep the dollar pressured and support BTC. A surprise upside in US labor figures or a shift in Fed messaging would likely re‑strengthen the USD and act as a headwind for BTC.
  • Exchange reserves: Continued declines in exchange BTC supply reduce immediate sell liquidity; a reversal (reserves rebuilding) would increase supply pressure.
  • Seasonality: October has historically been bullish for Bitcoin (gains in 10 of the past 12 Octobers), which complements the present flow and macro setup.

Risks and scenarios

Downside risks to monitor:

  • Momentum fade could trigger a pullback to daily support around $116,000.
  • Reversal of Fed‑cut expectations or stronger labor data could lift the USD and prompt BTC selling.
  • Institutional inflows can slow; concentrated holdings or sudden liquidations by large buyers could increase volatility.

Practical trade ideas and risk management

For traders and investors considering exposure to BTCUSD:

  • Breakout trade: Consider a measured long if BTC breaks and holds above $120,000 with volume confirmation; initial targets toward the 124k area and stops below $118,000 (adjust for personal risk tolerance).
  • Pullback trade: Look for buying opportunities near $116,000 support with tight stops below the level and position sizing aligned to risk limits.
  • Hedged exposure: Use options or inverse exposure to limit downside if macro data unexpectedly re‑prices Fed cuts.
  • Manage leverage: Rapid moves and high short‑term positioning raise volatility — reduce leverage or use smaller position sizes to avoid forced liquidations.

Where automated tools can help

Monitoring macro shifts, ETF flows and technical triggers across 24/7 crypto markets is time‑consuming. Automated solutions — from signal execution to continuous risk checks — can help traders respond faster to regime changes. If you want to combine active market monitoring with execution, consider tools such as the Bitcoin Trading Bot or the Trade Assistant Bot to automate strategy rules and risk controls while staying aligned with macro signals.

Short summary for forex traders

The DXY near one‑week trough (~97.50) amid US funding uncertainty and weak ADP prints is a core driver. USD softness has amplified risk‑asset flows into BTC and other risk instruments; forex traders should monitor USD crosses (especially EURUSD and GBPUSD) for confirmation of broader dollar trends that will influence BTC momentum.

Conclusion

Bitcoin's move above $118,000 is supported by sizable spot ETF inflows, falling exchange reserves and a macro backdrop that currently favors weaker USD and lower rates. Traders should watch $120,000 for a decisive breakout and $116,000 as the key support on a pullback. Use disciplined position sizing and consider automated trading tools to manage 24/7 crypto volatility efficiently. Related intraday coverage notes how BTC breaks $118,000 during flow-driven sessions.

If you trade crypto or forex and want to test automated setups for these conditions, try PlayOnBit's tools — including the Bitcoin Trading Bot and Trade Assistant Bot — to run strategies with real‑time signals and risk controls. Whether you focus on crypto trading or forex trading, an AI trading bot and automated trading can help execute rules consistently and reduce emotional errors. Visit PlayOnBit to try the AI trading bot and start automating your strategies today.