Bitcoin News Today: Institutions Fuel Bitcoin's $123K Surge as Fed Cuts Loom

Bitcoin's price surged past $123,000 in late September 2025, marking a significant rebound following a period of leveraged position liquidations earlier in the month. The cryptocurrency's rally has been driven by a combination of macroeconomic tailwinds, including expectations of U.S. Federal Reserve rate cuts, and a technical catalyst: a massive short squeeze in the derivatives market. Analysts and on-chain metrics suggest the momentum could extend Bitcoin's upward trajectory, with key resistance levels at $125,000 and $138,800 identified as potential targets .

The recent price action followed a sharp correction in late August, during which leveraged short positions were forced to close amid a rapid $12,000 rebound in Bitcoin's price. Between September 3–4, over $313 million in short futures positions were liquidated, signaling strong buying pressure. This short squeeze coincided with a broader shift in market sentiment, as investors increasingly view Bitcoin as a hedge against macroeconomic uncertainty. The U.S. Personal Consumption Expenditures (PCE) inflation data, which showed a 2.9% annual increase in line with expectations, has bolstered optimism that the Fed could cut interest rates to 3.50% or lower by early 2026-a scenario that has gained 40% probability in recent weeks .

Technical analysis further supports the bullish outlook. The Market Value to Realized Value (MVRV) model, an on-chain metric tracking the network's profit and loss distribution, indicates Bitcoin has broken through the +0.5 standard deviation (SD) level at $116,700. Historically, such breakouts have preceded sustained rallies, with the next major target at the +1 SD level of $138,800. Analysts note that the MVRV model's recent breach aligns with Bitcoin's performance in prior cycles, where sustained momentum followed similar technical milestones. However, the immediate focus remains on the $125,000 level, which, if breached, would confirm a cyclical breakout to all-time highs .

Institutional adoption has also played a critical role in Bitcoin's resurgence. U.S. spot Bitcoin and Ethereum ETFs have attracted over $28 billion in net inflows in 2025, with cumulative holdings exceeding 1.29 million BTC ($154 billion). These inflows, driven by a "stickier" allocation pattern compared to speculative flows, have anchored liquidity in regulated venues and reinforced demand. BlackRock, the largest ETF provider, now manages over $58 billion in assets under management, dwarfing peers like Fidelity's $12 billion. Meanwhile, corporate holdings of Bitcoin and Ethereum have surged, with public companies collectively holding 1.07 million BTC (5.4% of circulating supply) and 4.36 million ETH-a 88.3% increase in the past month .

Market dynamics are shifting as Bitcoin's dominance in the cryptocurrency market declines from a peak of 65.1% to 57.2%. This easing dominance suggests capital may be rotating into altcoins, a trend historically observed before stronger performances in non-Bitcoin assets. Stablecoin supply has also reached a record $277.8 billion, reflecting improved regulatory clarity and expanded use cases beyond trading, such as cross-border payments and settlement. Additionally, decentralized exchange (DEX) market share has climbed to 23.1% in spot trading and 9.3% in futures, indicating a structural shift in liquidity routing .

Looking ahead, analysts caution that Bitcoin must remain above $116,700 to sustain its rally, as a breakdown below this level could trigger a pullback. However, the current market structure, characterized by robust demand and institutional participation, suggests even minor corrections are unlikely to derail the upward trend. If the $125,000 target is achieved, the next focus will be on the $138,800 level, which represents a critical on-chain resistance point. With macroeconomic conditions favoring risk assets and global liquidity expanding, Bitcoin's trajectory appears poised to challenge historical highs in the near term .