- BTCUSD remains range-bound ahead of the Fed
- ETF outflows signal fresh buyers have yet to return
- Bullish Ripple and Bessent headlines, but momentum is missing
- Market worries: why did the summer rally fizzle out?
Recovery lacks conviction
Bitcoin investors have spent the past month wondering why the late August rally that lifted the world's largest cryptocurrency above $87,000 has lost momentum. Prices have since retreated towards $80,000 and are struggling to maintain a foothold above that level, having briefly slipped below it several times. More importantly, improved risk sentiment driven by AI-led gains in equities has yet to translate into meaningful demand for cryptocurrencies.
Persistent ETF outflows, with eight negative sessions recorded this month and withdrawals totalling $773 million this week, suggest institutional investors remain hesitant to return in size, casting doubt on the strength and sustainability of the recovery.
Fed test ahead
For now, markets remain focused on Wednesday's Fed decision. While policymakers are widely expected to leave rates unchanged, traders will be looking for clues about future tightening, with markets still pricing in one more rate increase before year-end and further tightening in 2027. That higher-for-longer outlook is supporting a firmer US dollar and elevated Treasury yields, creating a less favourable backdrop for risk-sensitive assets such as bitcoin.
Only a more dovish tone from the Fed could provide a temporary boost to sentiment. However, the bigger question is whether institutional demand returns. A lasting recovery will likely require a sustained return of ETF inflows rather than sporadic shifts in positioning.
$100,000 year-end target still looks distant
But investors remain unconvinced that Bitcoin is ready for another leg higher. Prediction market Polymarket assigns just a 17% probability of bitcoin reaching $100,000 by year-end, a move that would reclaim the yearly high near $98,000 and retrace more than 61.8% of the decline from the record peak. The odds of a move to $110,000 stand at only 9%.
Meanwhile, on-chain data suggests the $87,000 area remains a key hurdle, as investors who bought over the past two years continue to use rallies to lock in profits or break even.
Has the bear market ended?
Not everyone is bearish. Galaxy Digital argues that bitcoin's bear market ended in June when price action printed a yearly low near $57,775 and that the cryptocurrency has entered an accumulation phase, pointing to reduced selling from long-term holders and the coin's ability to remain above its 200-day moving average.
However, Galaxy also acknowledges that fresh buying remains subdued, while ETF flows have been inconsistent and prices remain well below the October 2025 record high of $126,163, underscoring the tug-of-war currently shaping crypto markets. Thus, while signs of accumulation may be emerging, the market appears to be waiting for confirmation that a new bull phase has begun.
Regulatory backdrop continues to improve
Away from price action, one of the week's biggest developments came from Ripple Labs Inc, which secured final approval to establish a national trust bank. Once operational, the bank will oversee reserves backing Ripple's RLUSD stablecoin and provide digital-asset custody services.
Adding to the constructive backdrop, US Treasury Secretary Scott Bessent reiterated his long-held view that digital assets and stablecoins can strengthen the US dollar's global dominance. While not a new message, the comments reinforced growing regulatory support for the sector, with Bessent also signalling that the SEC and CFTC could continue to advance crypto rules through agency action following the Clarity Act's failure to advance in the Senate on September 15.
Good news has not been enough
Perhaps the clearest signal about current market sentiment is that positive developments have failed to reignite demand. Despite improving risk appetite in equities, friendlier regulatory headlines, Ripple's banking approval and pro-crypto comments from Bessent, bitcoin remains stuck near $80,000. That suggests demand remains insufficient to absorb supply from investors taking profits near $87,000. Until fresh institutional buying re-emerges, bitcoin may continue to struggle for direction.
What could lift Bitcoin out of its rut?
BTCUSD continues to trade in a narrow range around the pivotal $80,000 level. Immediate resistance sits at the converging 20- and 50-day SMAs near $81,430, with a break above that zone opening the way towards $84,327 and ultimately the key $87,000 barrier, where profit-taking has repeatedly capped rallies. Momentum is showing tentative signs of improvement, with the RSI edging towards neutral territory. Conversely, a break below the range support of $80,000 could expose the $75,000 area, just above the 200-day SMA near $73,000.