What factors are driving the rise in Bitcoin’s price? Stay informed on the latest developments in cryptocurrency.

Bitcoin (BTC) momentarily surpassed $116,000 for the first time in a fortnight as traders adjusted their positions in anticipation of a dovish Federal Reserve decision, with new capital returning to digital asset products following a risk-off period in October.

At the time of writing, Bitcoin was priced at $114,683.03, reflecting a 0.15% increase over the past 24 hours. This movement indicates a combination of favorable macroeconomic factors and technical elements that shifted market sentiment after mid-October’s downturn left the market susceptible to short squeezes and renewed institutional interest.

Market participants are viewing the upcoming Fed meeting on Oct. 29 as a potential trigger. Traders are speculating that more accommodative financial conditions will benefit risk assets.

Moreover, a weaker dollar index (DXY) remains in the high-98 range, and subdued long-term yields near 4% on the US 10-year Treasury provide the macro environment that cryptocurrencies typically require to gain traction.

Lower interest rates diminish the opportunity cost associated with holding non-yielding assets and generally ease financial conditions.

Major altcoins exhibited varied performance. Ethereum was priced at $4,148.13, down 0.2% over the last 24 hours, while Solana decreased by 0.1% to $199.82. XRP increased by 0.1% to $2.64, and BNB rose by 0.5% to $1,143.17.

Cardano fell by 1.3% to $0.6725, and Dogecoin dropped by 1.5% to $0.2026. This divergence indicates that capital is focusing on Bitcoin rather than being distributed broadly across the cryptocurrency markets.

Flows reversed in digital asset products

CoinShares reported net inflows of $921 million into digital asset products for the most recent weekly period.

This reversal follows softer CPI data that rekindled institutional interest after October experienced consistent outflows. This shift clarifies why dip-buyers displayed confidence this week, viewing sub-$115,000 levels as opportunities rather than barriers.

Derivatives markets intensified the movement. Hundreds of millions in short liquidations occurred over the weekend and early on Oct. 27, according to CoinGlass estimates, as bearish traders were compelled to close their positions when Bitcoin surpassed significant technical thresholds.

This squeeze effect amplifies spot demand and accelerates price increases once resistance levels are breached, generating the momentum that propelled BTC toward $116,000.

Supply-side pressure has eased slightly. The trustee of Mt. Gox has extended the creditor repayment deadline by one year to Oct. 31, 2026, alleviating near-term forced selling risks from an overhang that has impacted sentiment for several months.

The official extension was noted in the trustee’s announcement and mitigates one factor that traders identified as a challenge.

Despite the recent positive developments, two risks persist. The same ETF and fund group that made purchases this week were net sellers in mid-October, and Fed communications can quickly alter risk sentiment.

If the likelihood of rate cuts diminishes or the dollar experiences a sharp rally, the macro factors supporting Bitcoin could swiftly become obstacles. This week’s Fed decision will determine whether the current positioning remains intact or unravels.

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