Bitcoin News Today: Bitcoin's Tug-of-War: Fed Signals vs. Volatility and Regulatory Crosscurrents

Bitcoin surged past $112,000 on Tuesday, driven by renewed optimism over Federal Reserve policies and institutional adoption, though analysts warn of persistent volatility as the market grapples with mixed signals from ETF flows and geopolitical tensions, according to a Benzinga report. The cryptocurrency's price briefly touched $114,000, a rebound from earlier declines below key support levels, as traders navigated a complex landscape of regulatory developments and shifting investor sentiment.

The Federal Reserve's recent announcement to explore payment accounts for crypto firms has injected fresh momentum into the market. By potentially granting access to Fed payment systems, the move signals a softening stance toward crypto integration, sparking speculation about broader institutional participation, the Benzinga report said. "The Fed's openness to crypto infrastructure could unlock liquidity and stabilize price discovery," said one trader cited in the report.

However, the rally has been anything but smooth. Bitcoin's price has oscillated within a tight $107,000–$112,000 range, with technical indicators showing a tug-of-war between bulls and bears. A break above $116,000 could signal the end of a recent correction, while a drop below $107,000 risks triggering a sell-off toward $100,000, according to on-chain analysis reported by Benzinga. The 200-day exponential moving average (EMA) at $108,062 has become a critical psychological barrier, with traders closely watching whether Bitcoin can reestablish dominance above it, as noted in an FXStreet report.

Regulatory shifts have also played a pivotal role. The U.S. Securities and Exchange Commission's (SEC) recent approval of spot Bitcoin ETFs has drawn billions in inflows, with BlackRock's IBIT alone managing $87 billion in assets, according to a Coinotag report. These products have drawn comparisons to Ethereum ETFs, which initially struggled but later rebounded with $14.59 billion in net inflows, a trend highlighted by Coinedition. Analysts suggest that XRP ETFs, if approved, could follow a similar trajectory, potentially boosting altcoin prices. However, the SEC's delayed review of XRP ETF applications has created uncertainty, with the U.S. government shutdown stalling decisions, the Coinedition analysis noted.

Meanwhile, geopolitical tensions have exacerbated market jitters. Bitcoin ETFs attracted $20 million in inflows last week, while Ethereum ETFs faced outflows of $127 million amid U.S.-China trade tensions, according to CryptoNews. Traders are bracing for further turbulence as central banks and policymakers navigate the intersection of crypto and traditional finance.

Institutional players are also reshaping the landscape. FalconX's $8 billion acquisition of 21shares highlights a broader trend of consolidation, as firms seek to capitalize on regulatory clarity and ETF-driven demand, Coinotag reported. The deal, part of a $10 billion surge in crypto dealmaking in Q3 2025, underscores the sector's maturation and its growing integration with traditional financial systems.

Despite the bullish catalysts, caution remains warranted. Over $557 million in liquidations occurred in the past 24 hours, with 141,966 traders affected, the Benzinga report said. Short-term volatility is likely to persist, with traders noting that a 10% rally in Bitcoin could liquidate $12 billion in shorts, while a 10% drop would trigger $6.98 billion in long liquidations.

As the market approaches the end of October, the battle between $100,000 and $112,000 will likely define Bitcoin's near-term trajectory. With the Fed's crypto-friendly signals and ETF inflows bolstering optimism, bulls remain cautiously optimistic—but the path to sustained gains will require navigating a volatile and unpredictable environment.

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