Bitcoin currently sits near $116k resistance, as markets await the Fed’s rate decision. Analysts debate whether Q4 will spark a recovery.
Bitcoin has found resistance at $116,000, according to analysts at Bitfinex.
They argue that the price will not break higher unless the level is reclaimed. So far, the cryptocurrency’s strength has weakened since its all-time high of $124,100 on August 14.
Many short-term buyers entered during the peak and have left recent cost bases clustered in the $108,000 to $116,000 range.
Fed Decision May Dictate Bitcoin’s Next Move
Investors are watching the Federal Reserve’s interest rate decision this Wednesday. According to the CME FedWatch Tool, markets currently see a 96.1% chance of a 25 basis point cut.
The outcome of this event could affect Bitcoin over the short term.
Tom Lee, co-founder of Fundstrat, sees the first rate cut of the year as a strong catalyst. He expects Bitcoin and Ether to make a “monster move” within three months.
Other analysts have different views, though. Ted Pillows, for example, predicts that Bitcoin could first drop to $104,000 before recovering.
The analyst says that a fall towards $92,000 before setting new highs could also be on the table.
Investor Behavior Shows Resistance
Bitfinex’s Alpha report shows how different groups of Bitcoin investors have reacted during recent swings. Long-term holders stayed steady and have been using dips as opportunities to accumulate.
By contrast, newer investors who bought during this year’s rally were more likely to sell and lock in profits.
The data shows that the three-to six-month cohort accounted for most of the recent selling pressure. On a 14-day average, they captured about $189 million in daily profits, which represented nearly 78% of all short-term holder gains.
This selling limited Bitcoin’s upside strength and reinforced $116,000 as resistance.
For a stronger rally, the market will need to absorb this supply and see fresh buying pressure.
Q4 as a Possible Bullish Catalyst
Looking ahead, analysts are pointing to October 1 as another possible turning point. Historically, the fourth quarter has delivered Bitcoin’s best performance. Since 2013, the average return during Q4 stands at 85.42%, according to CoinGlass.
This seasonality, combined with stronger support levels, could provide the foundation for a recovery.
Bitfinex analysts also note that Bitcoin has reclaimed $112,500 and defended $107,500, thereby creating a technical backdrop for further gains.
General Crypto Market Shows Signs of Stability
The total crypto market cap has improved, rising 4.8% this week and adding $180 billion.
This rebound supports the view that September’s negative seasonality may be ending.
Bitcoin’s rebound has been backed by buy-the-dip activity and redistribution of supply across acquisition levels.
Analysts argue that once Bitcoin reclaims $116,000, it could point to the start of a more meaningful recovery.
The Crypto Fear & Greed Index currently stands at 53, which means that there is a neutral mood among market participants. Sentiment could quickly change, though, if Bitcoin breaks above resistance or, conversely, fails to hold support.
