Bitcoin (BTC) Breaks $117,800, Surges to One-Month High Amid Federal Reserve Easing

Bitcoin (BTC) soared past $117,800 on October 19, marking a one-month high driven by increased buying interest following the U.S. Federal Reserve’s rate cut. This rally underscores Bitcoin's continued volatility and its sensitivity to macroeconomic developments.

Bitcoin Touches Key $117,888 Level Before Stabilizing

As of 10:25 a.m. KST on October 19, Bitcoin was trading at $117,347.40, reflecting a modest 0.57% gain, according to CoinMarketCap data. Earlier that day, the cryptocurrency briefly peaking at $117,888.41 at 3:50 a.m. before a slight correction took it down to $116,777. The asset subsequently found stability in the $117,000 region, signaling short-term consolidation.

This latest price rally represents a partial reversal of the sharp decline that followed Bitcoin’s September 23 peak at $117,979. After plunging to a monthly low of $100,779, the cryptocurrency began recovering, buoyed by market expectations surrounding the Federal Reserve's interest rate policy. Despite an initial dip immediately after the rate-cut decision, Bitcoin has rebounded sharply, reflecting renewed optimism among traders.

On-Chain Metrics Indicate Growing Bullish Sentiment

Key on-chain data reveals strengthening bullish momentum. Indicators such as order flow metrics and the Cumulative Volume Delta (CVD) highlight robust buying pressure. At the same time, open interest (OI)—a measure of active derivatives contracts—has shown significant growth.

Adding to the bullish backdrop, Bitcoin’s 24-hour trading volume surged by 41% to reach $67 billion, marking a sharp uptick in market activity. Analysts attribute this rise in volume to the Federal Reserve’s recent monetary easing measures. Federal Reserve Chair Jerome Powell hinted at potential further rate cuts, citing challenges such as slower job growth, a modest increase in unemployment rates, and the continuing battle against elevated inflationary pressures.

Analysts Identify Key Support and Resistance Levels

As Bitcoin navigates near-term volatility, various analysts have weighed in on its potential price trajectory.

Prominent trader Michael van de Poppe suggested on X (formerly Twitter) that Bitcoin is "testing resistance at $119,000" and noted that a breakout could pave the way for a move toward $123,700. He also pointed to $114,700 and $111,900 as crucial short-term support levels.

Similarly, Ali Martinez identified $115,440 as a key pivot point. Martinez explained, "If Bitcoin holds above $115,440, it could target a run towards $137,300. Conversely, losing this level might send prices down to $93,600." These insights provide traders with actionable benchmarks as they monitor for potential breakout or breakdown scenarios.

Rising Correlation Between Bitcoin and S&P 500

Market analysts have also observed an increasing correlation between Bitcoin’s price action and the S&P 500 in the wake of the Federal Reserve’s policy adjustments. Historical data, as highlighted by The Coin Republic, shows that the S&P 500 typically gains an average of 15% in the year following a rate cut. Given Bitcoin’s higher volatility and speculative nature, it has the potential to mirror or amplify such movements.

This growing correlation suggests that macroeconomic developments, including Federal Reserve policy and broader equity market trends, are playing an increasingly influential role in shaping Bitcoin’s price trajectory.

Outlook: Eyes on the Federal Reserve

As Bitcoin hovers near critical resistance levels, traders and investors are closely watching for signals of an extended rally or the risk of a sharp pullback. With the Federal Reserve maintaining a cautious approach in managing economic growth and curbing inflation, Bitcoin’s correlation with traditional financial markets is likely to remain a key driver in the near term.

The coming days will prove crucial for Bitcoin’s price performance, as market participants assess whether it can maintain momentum and break past $119,000 or if it will retreat to test lower support levels. In either scenario, macroeconomic policy and on-chain dynamics will continue to heavily influence Bitcoin’s direction.