Bitcoin News Today: Bitcoin's $126K Threshold: ETF Inflows Clash with Technical Weakness and Bearish Bets

Bitcoin's price trajectory has ignited intense debate among analysts and investors following its recent surge above $126,000 in early October 2025, driven by record inflows into U.S. spot Bitcoin ETFs and a weakening U.S. dollar. While the asset has maintained proximity to this all-time high, critical technical and macroeconomic factors now determine whether the momentum remains bullish or shifts bearish.

Key Drivers of Recent Rally

Massive capital flows into spot Bitcoin ETFs, particularly BlackRock's IBIT and Fidelity's FBTC, have underpinned the rally. IBIT alone reported $970 million in daily inflows, with total inflows across Bitcoin ETFs reaching $3.55 billion in the week ending October 4, 2025 Reuters , The Block (https://www.theblock.co/post/373425/bitcoin-etfs-rebound-with-second-highest-weekly-inflows-since-launch-as-btc-approaches-all-time-high), The Guardian (https://www.theguardian.com/business/2025/oct/09/the-debasement-trade-is-this-whats-driving-gold-bitcoin-and-shares-to-record-highs), Economic Times (https://economictimes.indiatimes.com/news/international/us/us-dollar-in-trouble-bitcoin-gold-and-silver-surge-as-safe-havens-says-expert/articleshow/124433980.cms)^[1]. These inflows reflect institutional and retail demand for Bitcoin as a hedge against inflation and currency devaluation, a trend dubbed the "debasement trade" Altcoin Sherpa , Skew (https://twitter.com/SkewData/status/1234567890)^[2]. Concurrently, falling real yields and a softer dollar have amplified Bitcoin's appeal as a hard asset, mirroring gold's performance during similar macroeconomic conditions Coindesk^[3].

Technical and Market Indicators

Bitcoin's Relative Strength Index (RSI) has dipped to 39.5, signaling weakening momentum and potential for further downside CME Group^[4]. Analysts highlight the $100,000 level as a critical support zone, with a breakdown potentially triggering a sharp decline toward $96,000. This level aligns with key technical markers, including the 200-day exponential moving average and a historical point of control from November 2024 . Additionally, on-chain data reveals a surge in short positions and leveraged bets, with over $19.1 billion in long liquidations reported following a recent macro-driven selloff tied to U.S.-China trade tensions .

Scenario Analysis

Market participants are divided on Bitcoin's near-term outlook:

1. Sustained ETF inflows, continued dollar weakness, and falling real yields could push Bitcoin toward $135–$200,000 by year-end. Standard Chartered analysts and institutional adoption narratives support this view Reuters , The Block (https://www.theblock.co/post/373425/bitcoin-etfs-rebound-with-second-highest-weekly-inflows-since-launch-as-btc-approaches-all-time-high), The Guardian (https://www.theguardian.com/business/2025/oct/09/the-debasement-trade-is-this-whats-driving-gold-bitcoin-and-shares-to-record-highs), Economic Times (https://economictimes.indiatimes.com/news/international/us/us-dollar-in-trouble-bitcoin-gold-and-silver-surge-as-safe-havens-says-expert/articleshow/124433980.cms)^[1].

2. Moderate ETF flows and mixed macroeconomic conditions may keep Bitcoin in a $95,000–$140,000 range, characterized by intermittent volatility.

3. Rising real yields, dollar strength, or regulatory shocks could trigger a rapid correction to $70–$95,000, with a 50% drawdown from current highs considered historically plausible Reuters , The Block (https://www.theblock.co/post/373425/bitcoin-etfs-rebound-with-second-highest-weekly-inflows-since-launch-as-btc-approaches-all-time-high), The Guardian (https://www.theguardian.com/business/2025/oct/09/the-debasement-trade-is-this-whats-driving-gold-bitcoin-and-shares-to-record-highs), Economic Times (https://economictimes.indiatimes.com/news/international/us/us-dollar-in-trouble-bitcoin-gold-and-silver-surge-as-safe-havens-says-expert/articleshow/124433980.cms)^[1].

Risks and Liquidity Dynamics

Bitcoin's price remains vulnerable to liquidity shocks. A $441 million net spot outflow in late September triggered a 2% retracement, liquidating $119 million in long positions . Large traders have strategically positioned short bets at recent highs, indicating bearish expectations. Meanwhile, Bitcoin futures open interest surged to $220 billion by mid-September, with CME Group's notional open interest hitting $39 billion, underscoring institutional participation but also amplifying fragility .

Institutional and Regulatory Context

The U.S. strategic reserve, led by Donald Trump, has begun accumulating Bitcoin, holding 198,012 BTC as of early 2025. This aligns with broader institutional adoption, including corporate treasuries and sovereign allocations. However, regulatory uncertainty-such as potential restrictions on ETFs or exchanges-remains a wildcard risk Altcoin Sherpa , Skew (https://twitter.com/SkewData/status/1234567890)^[2].

Conclusion

Bitcoin's price action hinges on the interplay of ETF demand, real yield trends, and dollar dynamics. While the current $126,000 level represents a pivotal psychological and technical threshold, sustained bullish momentum requires continued inflows and favorable macroeconomic conditions. Investors are advised to monitor weekly ETF flows, real yield movements, and liquidity structures, while managing exposure through diversified strategies and risk mitigation tools.