Bitcoin News Today: Bitcoin Soars Past $120K as Institutional Buying and Fed Policy Collide with Shutdown-Driven Safe-Haven Demand

Bitcoin rebounded above the $120,000 threshold in early October 2025, driven by institutional buying, liquidity inflows, and macroeconomic factors such as U.S. government shutdowns and Federal Reserve policy shifts. The cryptocurrency initially corrected from an all-time high near $126,000 but stabilized as net taker volume-measuring the difference between buy and sell pressure-shifted from a bearish $400 million to neutral levels, signaling a balance in market forces . Binance data showed net purchasing pressure exceeding $500 million in early October, with an imbalance ratio of 0.23, indicating buy orders outpaced sells by 23% . This aligns with onchain analysis showing controlled profit-taking rather than panic selling, reinforcing a "healthy cooling phase" ahead of potential institutional-driven gains .

The U.S. government shutdown, triggered by a failed Senate funding bill, exacerbated market volatility and pushed investors toward safe-haven assets like Bitcoin and gold. Deutsche Bank strategist Jim Reid noted the shutdown created "complete blindness" for policymakers due to delayed economic data, potentially accelerating a Fed rate cut in October 2025 . Lower real yields and a weaker dollar historically favor Bitcoin, with 21Shares strategist Matt Mena linking the shutdown to increased odds of a 25-basis-point rate reduction . This dovish environment mirrors conditions seen during Bitcoin's 2020 rally, when a 0.25% rate cut preceded a 1,600% price surge .

Institutional adoption also played a pivotal role. Spot Bitcoin ETFs, approved in January 2024, continued to attract capital, with BlackRock's ETF alone amassing $57 billion in assets by March 2024. By December 2024, ETFs collectively held 51,500 BTC-nearly triple the monthly mining output-creating a supply shock that propelled prices upward . Whale accumulation further solidified the rally, with large holders adding 55 million XRP ($1.1 billion) over three days and consistent net holder position changes since August . Onchain metrics suggest this activity reflects strategic accumulation rather than speculative frenzy, contrasting with the 2020-2021 retail-driven boom.

The Bitcoin halving in April 2024 reduced new supply by 50%, contributing to the bullish trend. Post-halving consolidation gave way to an 86% price increase by October 2025, supported by political shifts, including a pro-crypto U.S. administration and statements from figures like Donald Trump . Regulatory clarity also bolstered confidence, with the SEC's September 2025 approval of generic listing standards potentially enabling simultaneous approvals for 11 XRP ETF proposals. This could inject $3–8 billion in institutional capital, mirroring Bitcoin and Ether ETF inflows .

Analysts remain cautious but optimistic. While Bitcoin's 2025 rally has seen $118,500 in early October 2025, some predict a $250,000 target by mid-2026 if geopolitical fragmentation and monetary easing persist . Cardano founder Charles Hoskinson argued that Bitcoin's global utility as a settlement layer-free from traditional banking constraints-would grow in relevance amid U.S.-China-Russia tensions . Conversely, bearish indicators include potential short-term corrections if Bitcoin fails to hold above $120,000 or faces liquidation clusters between $80,000 and $90,000 .

The market's broader implications extend to crypto's institutionalization. Projects like Wrapped Bitcoin (WBTC) and Bitcoin-native NFTs (e.g., Ordinals) are expanding use cases beyond speculation, while DeFi and Web3 integration gains traction. Continued Fed rate cuts, global liquidity expansion, and regulatory clarity-particularly for altcoin ETFs-could cement Bitcoin's role as a macroeconomic hedge and mainstream asset class. For now, Bitcoin's $120,000 reclamation reflects a confluence of policy shifts, institutional demand, and geopolitical dynamics, positioning it for further volatility and potential long-term gains.

Source: [1] Daily Crypto Signals: Bitcoin Holds $123K, XRP Eyes Rebound (https://www.fxleaders.com/news/2025/10/09/daily-crypto-signals-bitcoin-holds-123k-xrp-eyes-rebound-amid-etf-speculation/)

[2] Bitcoin (BTC) Price News: Rebound with CIFR, BITF Leading (https://www.coindesk.com/markets/2025/10/08/bitcoin-rebounds-above-usd123k-as-miners-rally-vaneck-sees-usd644k-btc-amid-gold-gains)

[3] Bitcoin Blazes Past $120,000 as ETF Inflows and Fed Rate Cut ... (https://www.financialcontent.com/article/breakingcrypto-2025-10-2-bitcoin-blazes-past-120000-as-etf-inflows-and-fed-rate-cut-hope)

[4] Bitcoin Tops $120,000 Amid US Government Shutdown - BeInCrypto (https://beincrypto.com/bitcoin-tops-120k-amid-us-shutdown)

[5] Bitcoin Price Recovery Could Be Capped at $90K - Here's Why (https://cointelegraph.com/news/bitcoin-price-recovery-could-be-capped-at-90-k-here-s-why)