Bitcoin retesting $125,000? ETFs draw $445m as Fed cut looms

Core Viewpoint - The Federal Reserve's potential interest rate cut on October 29 could drive Bitcoin's price to $125,000, with a consensus forming around a shift towards looser monetary policy that typically benefits Bitcoin [1]. Group 1: Interest Rate Expectations - The CME FedWatch tool indicates a 97% chance of a 0.25% interest rate cut later this month, supported by Polymarket data showing a 98% probability of the same [2]. - Lower interest rates generally encourage investment in risk-on assets, which includes cryptocurrencies [2]. Group 2: Market Performance - Bitcoin is currently trading above $115,000, driven by institutional demand, with exchange-traded fund inflows exceeding $445 million last week [3]. - The total cryptocurrency market has gained 8% in value since $19 billion in positions were liquidated in October, now surpassing $4 trillion [2]. Group 3: Market Sentiment and Strategy - Market sentiment remains broadly supportive for risk assets, with a bullish outlook on Bitcoin as the easing cycle approaches, although caution is advised around market volatility [3][4]. - ETFs are seen as a consistent demand source, pulling coins off the market, but traders are currently taking incremental exposure rather than making large bets [4]. Group 4: Legislative Concerns - Ongoing government shutdown could negatively impact market sentiment, delaying important crypto legislation and altcoin ETF approvals [5]. - The timeline for legislative approval is tightening as the holiday season approaches, which could further affect market dynamics [5]. Group 5: Recent Price Movements - Bitcoin has increased by 2.1% in the past 24 hours, trading at $115,148, while Ethereum has risen by 4.2%, trading at $4,159 [6].