Bitcoin Price Volatility Decreases Ahead of FOMC Meeting

Market Consolidation Phase Extends

In mid-September, Bitcoin briefly reached a one-month high in pre-market trading, testing values above $114,000. BTC last traded at this level on August 23, before falling below $109,000 on September 1. At this point, it found a bottom and entered a consolidation phase, attempting to rebound.

Whales holding more than 1,000 coins changed tactics last month and began accumulating BTC. During this period, 13 new wallets with balances exceeding 1,000 coins emerged on the network. The total number of Bitcoin whales has reached 2,087.

A similar pattern was observed on the Ethereum blockchain in August. According to data, the number of ETH whales controlling more than 10,000 coins increased by 48 in a month, rising to 1,275.

Whale support was the main trigger for the August rally. At the end of last month, large investors took profits, and BTC faced pressure in September.

This week Bitcoin briefly surpassed the $114,000 level but had to retreat due to selling pressure. The cryptocurrency is trading at $113,300, and it's important not to overlook that its active consolidation is lasting longer than expected.

The Relative Strength Index (RSI) shows BTC is overbought. Therefore, the probability of a jump in the coming days is low. On the contrary, downside risks have increased as whales have changed tactics to wait for dips following the August pumps.

While the leading digital currency continues to trade in a narrow band, gold has gained value. The American stock market is also rising in the first half of the month, but at a more modest pace.

Considering the strong correlation between BTC and the S&P 500 index, analysts predict that crypto will enter a bull period, but somewhat later. Investors will need time for capital redistribution in favor of BTC.

According to data, due to strong selling by whales in August, BTC's value weakened by 6.43%.

In September, the currency increased by 4.63%, but it still lacks the ability to recover positions lost since August 22. In 2023-2024, September typically ended with a small strengthening of Bitcoin, but the amplitude of fluctuations remained low throughout this period.

Another important indicator for assessing the near-term prospects of the digital currency is the sentiment in the futures market.

Open interest in BTC futures contracts fell to $41.1 billion the previous day.

The perpetual swap rate still remains in positive territory. However, the ratio between long and short positions (Long/Short) is decreasing, creating additional risks for the asset.

Negative Social Media Sentiment Stabilizes BTC Value

When assessing the near-term prospects of digital currency, in addition to technical indicators, attention can be paid to social media sentiment.

In September, negative predictions for Bitcoin and Ether dominated on Telegram, X, Reddit, and 4Chat. The increase in pessimistic sentiment was a result of the recent decline in BTC and ETH.

The prolonged consolidation is worrying users. Many predict that Bitcoin will fall below $100,000, and ETH below $3,500. Currently, the largest cryptocurrencies are trading well above these levels.

The return of negativity often accelerates the achievement of local bottoms. Therefore, many in expert circles believe that the $110,000 level could be a fundamental point for Bitcoin. This means that support should increase when collapse risks emerge here, as most traders are currently not interested in the negative scenario.

If, on the contrary, positive sentiment begins to dominate on social media, especially while the asset's value is increasing, one should be prepared to take profits and withdraw.

This week, there was again an investment inflow into Bitcoin ETFs. If the flow continues in the coming days, the price could rise to $115,000. However, when approaching this psychological level, crypto will inevitably face strong resistance.

Since the beginning of 2025, net fund inflows to BTC ETFs have been $16 billion. During the same period, Ethereum ETFs attracted $10 billion. However, in September, ETFs focused on ether faced an outflow of $840 million, while Bitcoin funds successfully attracted $638 million.

The leading digital currency is also being purchased by investment and software companies.

Fed May Support a New Rally in Bitcoin

Next week, the decision regarding the Federal Reserve's policy rate is expected. Experts agree that the regulator will reduce the interest rate by 0.25%.

The loosening of monetary policy will create conditions for capital flow into risky assets. In this case, the most attractive instruments for investors will be IT company shares and digital currencies.

Bitcoin typically jumps after the Fed's decision to lower interest rates.

According to analysts' predictions, traders will redistribute some capital in favor of Bitcoin and altcoins following the easing of monetary policy. In this case, the leading digital currency could break through the resistance level in the range of $113,000 to $114,000 and rise to $116,000.

Moreover, some observers note that if bulls become active, the result of a new run could be reaching $119,000.

The reduction of exchange BTC should also contribute to the increase in the asset's value. According to CryptoQuant, 79,000 BTC left exchanges in August. This amounts to $8.87 billion.

The trend of cryptocurrency outflows from exchange addresses strengthened at the beginning of autumn. As of September 11, there were 2.473 million BTC on exchanges, which decreased by 0.1% over the past 24 hours.

The average purchase price for short-term investors is $109,400.

For long-term investors who have been buying crypto for more than a year, this price is $36,700.

Therefore, it is impossible to rule out that hodlers will switch to selling again when BTC attempts to expand again and approaches $120,000. However, the likelihood of such a rapid rise in the coming weeks is low, given the decline in institutional crypto purchases.

CryptoQuant notes that if the Strategy (MicroStrategy) company purchased 134,000 coins last November, this amount dropped to 3,700 BTC in August.

Institutional demand has decreased, causing a weakening in bitcoin's volatility. The decrease in the amplitude of cryptocurrency fluctuations is also contributed to by the reduction in the number of transactions on the blockchain.