Bitcoin Stabilizes Above $105K as Macro Pressures Ease

Bitcoin’s recent price action suggests the cryptocurrency may be establishing a foundation for its next upward move. According to CoinGecko data, Bitcoin gained nearly 2% over 24 hours, setting a high of $109,405 and fueling a minor rally across the broader altcoin market. This stabilization above the $105,000 level represents a significant psychological threshold for traders and investors who have been watching for signs of market direction.

Peter Chung, head of research at Presto Research, expressed confidence in the current price level, telling Decrypt: “I think Bitcoin is bottoming here. I expect the next move is more likely to be upward rather than downward.” This sentiment reflects growing optimism among market participants that the worst of the recent selling pressure may be behind us, though experts remain cautious about potential downside risks.

The potential bullish reversal follows what market participants are calling the Federal Reserve’s dovish pivot last week, in which Chair Powell signaled that quantitative tightening may be coming to an end and that interest-rate cuts are on the table. With the end of QT in sight, risk assets like Bitcoin may benefit from a loosening of financial conditions as liquidity withdrawal slows.

Sean Dawson, head of research at Derive, emphasized the significance of this policy shift, noting that “the Fed’s plan to end quantitative tightening, which involves reducing the central bank’s balance sheet, will be bullish for Bitcoin.” He explained that the return of liquidity creates a more favorable environment for speculative assets. According to bond traders, a quarter-point rate cut is expected at the Fed’s next decisive meeting scheduled on October 29.

While a larger-than-expected rate cut would be positive for Bitcoin’s price action, Dawson cautioned that “this would persist and manifest itself on longer time horizons likely by the first quarter of next year.” This timeline suggests that while the policy environment is turning favorable, the full effects may not be immediately visible in Bitcoin’s price.

Meanwhile, a softening of the U.S.-China trade war, which previously triggered a historic liquidation cascade earlier in the month, is also expected this week. Treasury Secretary Scott Bessent and Vice Premier He Lifeng are scheduled to meet in Malaysia to defuse tensions further, potentially removing a significant overhang from risk markets.

Dawson echoed Chung’s positive sentiment but highlighted the ongoing geopolitical risks, cautioning that “the risk of escalation in the U.S.-China trade war could cause a further tumble.” He emphasized Bitcoin’s sensitivity to these developments, noting that “Bitcoin is extremely sensitive to these talks,” and that the largest price moves this year have followed tariff announcements.

The immediate future for Bitcoin and the broader crypto market hinges on Friday’s upcoming inflation report, though experts indicate that the outcome of U.S.-China trade negotiations holds greater sway over market sentiment. Dawson observed that “should there be a positive resolution to these fears, we’d likely see a significant upward rally,” highlighting the potential for substantial gains if geopolitical tensions continue to ease.

Market analysts are carefully balancing the positive macroeconomic developments against remaining uncertainties. Dawson summarized the current consensus, stating: “This is probably a local bottom. Lower rates push investors up the risk curve into assets like crypto.” This dynamic explains why the Federal Reserve’s potential shift toward easier monetary policy creates such a favorable environment for Bitcoin and other cryptocurrencies.

However, the experts remain measured in their optimism, recognizing that while the setup appears bullish for 2026, the path forward contains significant variables. The combination of Federal Reserve policy normalization, evolving U.S.-China trade relations, and ongoing inflation concerns creates a complex landscape where Bitcoin’s price action will reflect the interplay of these fundamental forces.