Bitcoin’s Path Back To $112k And Higher Depends On Four Key Factors
Bitcoin’s momentum is restrained by uncertainty in interest rate policy, inflation expectations, the pending MSCI decision on crypto-focused firms, and stress in BTC derivatives.
Bitcoin derivatives and cautious interest rate expectations keep sentiment restrained, yet improving liquidity conditions bolster upside potential.
Regulatory easing and MSCI’s review of BTC-heavy firms could lift risk appetite, supporting a more constructive medium-term outlook for Bitcoin.
Bitcoin (BTC) has been pinned below $92,000 since Thursday and is down 22% in the last 30 days, but the situation could change soon. Bulls expect multiple governments to expand their money supply to support their economies and rising fiscal deficits, while bears often cite softer labor indicators and mounting concerns over artificial intelligence investment trends.
Both views may hold merit, and the recent short-term weakness could ultimately provide the foundation for a more durable Bitcoin rally. Four catalysts will help determine how quickly the price can retest the $112,000 level last seen four weeks ago.
The iShares TIPS Bond ETF tracking US Treasury Inflation-Protected Securities resumed its upward trajectory after retesting support at 110.50 on Thursday. The ETF typically advances when investors anticipate higher inflation, a backdrop that tends to favor Bitcoin as traders seek alternative hedges.
Bond futures data from the CME FedWatch Tool shows traders assigning a 78% probability that the US Federal Reserve (Fed) maintains interest rates at 3.50% or above through Jan. 26, up from 47% on Oct. 24. Lower rates generally benefit companies reliant on leverage and often stimulate consumer credit demand.
The uncertainty stemming from the extended US government funding shutdown, which lasted until Nov. 12, could prompt the Fed to leave rates unchanged in December. Consequently, traders are closely monitoring the US Bureau of Labor Statistics’ November jobs report due Dec. 16 and the Fed’s preferred inflation gauge, the November core Personal Consumption Expenditures (PCE) index, set for release on Dec. 26.
A significant shift is likely in the first half of 2026. US Fed Chair Jerome Powell’s term ends in May, and US President Donald Trump has made clear he prefers a candidate who favors a less restrictive monetary stance. No nomination date has been announced, and the process typically includes several months of Senate hearings and votes.
Bloomberg also reported that US regulators ha
Source: CoinTelegraph
