21.09.202612:11 Forex Analysis & Reviews: Will Bitcoin recover to $100,000?

What doesn't kill us makes us stronger. Bitcoin withstood a double hit — the Fed's first rate hike in three years and the Senate's rejection of the Clarity Act. Expectations of a positive verdict had driven inflows into crypto-focused ETFs. A sharp outflow followed, but the SEC's decision to allow digital versions of securities to be used in trading restored demand for specialized ETFs and revived BTC/USD.

The Senate's rejection of the Clarity Act, a bill intended to regulate crypto markets, was not a shock to Bitcoin — merely an unpleasant incident. It was not a permanent refusal but a postponement. Sooner or later, under pressure from Donald Trump, the law will be passed; the remaining task is to agree on details — for example, permitting digital versions of securities, which the SEC has already allowed. As a result, inflows into ETFs followed the outflows, fully offsetting the earlier drain, and BTC/USD shot up to levels not seen since late January.

Capital flows into Bitcoin ETFs

US stock indices also lent a hand to Bitcoin by stubbornly refusing to correct, despite the Fed's first tightening since 2023 and long-term Treasury yields at highs not seen since 2007. Ultimately, these developments may be evidence of the US economy's strength and resilience. If so, together with impressive corporate profits, this will be a tailwind not just for the S&P 500 but for BTC/USD as well.

Treasury yield dynamics

Strong global risk appetite, inflows into crypto-focused ETFs, and Bitcoin's return to being an asset purchased simply because it is rising have given a fresh impetus to the BTC/USD rally.

The US dollar has also helped digital assets by showing reluctance to continue climbing. Investors are gradually regaining their composure after the FOMC meeting and focusing on the mismatch between the derivatives market's pricing of three further rate hikes over the next 12 months and the Fed's own projections, which imply only one additional federal funds increase in 2026 and 2027.

The Fed's unwillingness to rush, given the strength of the US labor market and economy, could create a Goldilocks environment not only for US stocks but also for risk assets such as cryptocurrencies.

Technically, the daily BTC/USD chart shows a breakout above the recent consolidation range and a resumption of the uptrend. Long positions opened from $79,850 make sense to hold and to add to on pullbacks. Target levels to watch are $90,500 and $96,000.