Bitcoin spooked the market into the final week of September with a return to $112,000.
- Bitcoin’s price action disappointed traders this week, with many now forecasting a retest of support near $100,000.
- The recent dip triggered the largest single crypto long liquidation of the year, wiping out over $1 billion.
- Traders remain focused on the Federal Reserve and Chair Jerome Powell, as fresh inflation data is expected soon.
- Meanwhile, speculation is mounting online about a potential major announcement related to Bitcoin from the US political sphere.
- Profitability metrics echo patterns seen in previous bull markets, with early “pre-euphoria” signals suggesting the approach of a market top.
Bitcoin Divides Traders Ahead of Key Support Test
Bitcoin kept traders on edge as the final full week of September got underway.
Following a quiet weekend, BTC’s price swung into volatility, plunging sharply to $112,000, according to Cointelegraph Markets Pro and TradingView data.
Traders remained divided over the implications of the move. While some cautioned that further losses could be on the horizon, others anticipated a rebound toward new local highs following what appeared to be a downside fakeout.
“Key level being retested—after reclaiming it at the start of the month,” trader Jelle commented on X.
“Hold the higher low here, and $BTC likely pushes for $120,000 next.”
Jelle described the support retest at $112,000 as “very clean” while demanding a return to $116,000.
Fellow trader Captain Faibik viewed the dip as the beginning of a broader correction.
“I already warned back in August that buyers would get trapped—and that’s exactly what happened. Late buyers got caught, and since then #Bitcoin has dropped 13%,” he wrote on X.
“From here, I’m expecting another bearish leg that could drag BTC down toward the $100k zone.”
An accompanying chart illustrated a breakdown of a rising wedge pattern on the BTC/USD daily chart.
Crypto commentator WhalePanda expressed frustration over Bitcoin’s weakness, especially as gold and US stock markets hit fresh all-time highs last week.
“This past week saw $890 million in net ETF inflows, and Saylor added more,” he noted, referencing US spot Bitcoin ETFs and MicroStrategy’s Bitcoin holdings.
“Bitcoin is flat on the weekly, with a rate cut, and all other assets, stock indexes, gold, etc, closing a very green week. Almost seems like there are more than 21 million BTC in circulation.”
Liquidations Mark a Bearish Record for 2025
BTC/USD may have bottomed near $112,000 after a modest 2.8% drop, but the overnight dip hit traders hard.
Leverage came under the spotlight Monday, as roughly $3,000 of downside in BTC triggered over $1 billion in crypto liquidations.
According to monitoring resource CoinGlass, total liquidations reached $1.7 billion within 24 hours at the time of writing, with longs accounting for $1.62 billion.
“The largest long liquidation so far this year,” CoinGlass confirmed to followers on X.
Onchain analytics platform Glassnode revealed that longs were especially vulnerable in the $113,000 area.
Reacting to the liquidation, trader Daan Crypto Trades noted that around $2 billion in open interest had been wiped out.
“A big wipeout across the board. Now we wait and look for strength within the chaos,” he added.
Looking ahead, some market participants expect conditions to deteriorate further before a recovery takes hold.
Crypto investor and entrepreneur Ted Pillows warned that BTC could target a sizable block of bid liquidity before rebounding.
“$BTC faces over $2 billion in long liquidations between the $106,000 and $108,000 levels,” he predicted.
“A sweep of this level seems highly likely in the coming weeks before any big upward move.”
Markets Focus on Fed’s Powell During PCE Week
This week, the Federal Reserve’s preferred inflation gauge is set for release, with markets speculating on potential interest-rate cuts.
The Personal Consumption Expenditures (PCE) index for August will cap several days of insights from Fed officials, including a speech by Chair Jerome Powell on Tuesday at the Greater Providence Chamber of Commerce 2025 Economic Outlook Luncheon in Warwick, Rhode Island.
Following last week’s first rate cut of 2025, traders are watching Powell closely for signals on the Fed’s future policy path, with risk assets hoping for a dovish tone.
CME Group’s FedWatch Tool indicates that expectations for the Fed’s Oct. 29 meeting strongly favor another 0.25% rate reduction.
In the latest edition of its newsletter, The Market Mosaic, trading resource Mosaic Asset Company cautioned that further rate cuts are far from guaranteed.
“Updated Fed projections suggest a couple more rounds of rate cuts before year-end, but these forecasts are far from unanimous,” the newsletter noted.
“Of the 19 officials providing forecasts, seven saw no need to cut rates further. The dual threat of rising inflation along with recent weakening in labor market data are dividing central banks officials.”
The standoff between inflation and weak labor-market data puts this week’s initial jobless claims in sharp focus, with traders bracing for potential snap volatility.
Bitcoin Poised for “Massive Political News”
Speculation is mounting over a major US political announcement this week that could impact Bitcoin and altcoins, as BTC price weakness continues.
Markets appear to be pricing in the rumors already, with some suggesting the decline reflects classic frontrunning behavior after reports of “massive political news” spread on social media.
While details remain unclear, Dennis Porter, CEO and co-founder of digital asset policy group Satoshi Fund, hinted in a Sunday X post that the move, expected Tuesday, would “reshape the trajectory of Bitcoin politics.”
Crypto markets have grown increasingly sensitive to signals from US politics in 2025, fueled by both excitement and frustration surrounding the proposed Strategic Bitcoin Reserve (SBR). The idea of the US government buying a massive tranche of BTC initially sparked major buzz, but repeated announcements from the Trump administration never translated into action.
Still, as Cointelegraph continues to report, the concept remains very much alive.
“I still think there’s a strong chance the US government will announce this year that it has formed the Strategic Bitcoin Reserve (SBR) and is formally holding BTC as a strategic asset,” Alex Thorn, head of firmwide research at Galaxy Digital, wrote on X earlier this month.
Thorn argued that markets have “underpriced” the likelihood of the SBR becoming reality.
Adding to the speculation, US lawmakers met last week with crypto industry executives — including MicroStrategy’s Michael Saylor — with the SBR reportedly on the agenda.
Profit Data Hints a Bull Market Top Could Be Near
Looking beyond short-term moves, new research suggests Bitcoin has entered a “pre-euphoria” phase.
In its latest Quicktake blog post, on-chain analytics firm CryptoQuant highlighted a key signal from the market value to realized value (MVRV) metric, which compares Bitcoin’s market cap to the value of coins at their last movement.
By analyzing the 30-day rolling difference in MVRV between long-term holders (LTH) and short-term holders (STH), CryptoQuant found a widening divergence. The profitability of coins held for six months or more is rising faster than that of short-term holdings — a sign contributor Crazzyblockk described as “pre-euphoria.”
“This phase has historically been the direct precursor to the final, parabolic price surge of each major bull cycle,” they explained.
An accompanying chart shows that this divergence has appeared at every previous Bitcoin cycle top.
“Crucially, while the MVRV difference is in a clear uptrend, it has not yet reached the extreme levels characteristic of past market tops. This indicates that significant upside potential remains and the cycle’s peak is still ahead.”
