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Bitcoin has recently achieved new all-time highs in US dollar terms, reaching approximately $126,000. In the short term, the recent US government shutdown has sparked increased interest in digital currencies, as evidenced by investor movements in exchange-traded funds (ETFs).
On a larger scale, there is speculation that the US government might start accumulating Bitcoin reserves, which could drive prices up by several tens of thousands of dollars. From a market perspective, it is crucial for the ongoing demand to persist, as a surge in selling activity could lead to a double top pattern, a bearish indicator.
Since the beginning of October, the US government has been shut down due to disagreements over a temporary budget. This deadlock is primarily because Democrats are advocating for continued funding of expensive healthcare programs. It’s currently difficult to predict the outcome of this standoff, but a compromise seems likely.
However, if the Democrats succeed in keeping these costly programs (which seems unlikely), it could lead to increased market pressure on the US dollar. This situation might, in turn, support the growth of Bitcoin and other assets, as it would likely result in more government spending financed through added debt.
In this context, it’s noteworthy that JP Morgan, a major player in the global financial market, is recommending a moderate inclusion of Bitcoin in investment portfolios. This recommendation highlights the growing acceptance of Bitcoin as a mainstream financial asset.
According to data from Glassnode, the start of the new month has seen positive inflows into ETFs, marking a fresh demand impulse. Since we are still well below the net levels seen in previous multi-month waves, this trend is likely to continue in the coming weeks.
Additionally, a slowdown in selling by long-term holders has balanced the supply and demand levels, further supporting the potential for upward movement in the market. In summary, several factors indicate a likely continuation of price increases, though a brief technical correction cannot be ruled out.
From a technical standpoint, the market is exhibiting a clear supply reaction following a minor pullback from Bitcoin’s historical highs. This suggests at least a local rebound in the ongoing upward trend. Sellers are currently eyeing the support level around $118,000 per coin as a short-term target.
Should a deeper correction occur, the $108,000 area will be crucial to watch, as it has been tested multiple times in the past. Despite potential corrections, the primary objective for continuing the upward trend remains the next significant round level of $130,000.
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