Key Points

• Technical Analysis: $107,700 is a key support level, with $117,600 as a short-term resistance.
• Capital Flow: USDT.D is nearing critical support at 3.8%, indicating potential capital rotation into risk assets.
• Trend Analysis: The bullish trend remains intact, with the current uptrend only ending if Bitcoin falls below $107,000.

1. Technical Analysis: Bullish Consolidation in a Range-bound Market

1.1 Price Structure Interpretation

Since Bitcoin first breached the $100,000 mark in December 2024, it has experienced a broad consolidation from $92,000 to the historical high of $124,517. The current trading range of $107,000 to $124,000 is essentially a price discovery process at an unfamiliar price level in market history.

Key Technical Levels:

• Support: $107,700 (lower boundary of the $107,000-$124,000 range)
• Resistance: $117,600 (short-term pressure point)
• Critical Support: $109,676 (head-and-shoulders neckline)

1.2 Trend Channel Characteristics

The price is moving within an ascending trend channel, with recent testing of the lower channel boundary. The moving average system provides multi-tiered support:

• Short-term (20-day EMA): ~$117,500, with the current price below this level
• Medium-term (50-day EMA): ~$114,800, still offering technical support
• Long-term (100-day and 200-day EMA): ~$109,900 and ~$102,500, respectively

This moving average setup suggests that while short-term momentum has slowed, the medium- and long-term trend remains intact.

1.3 Pattern Analysis

A potential head-and-shoulders formation is emerging, though this pattern has not yet been confirmed. Key indicators include:

• Trend Continuation: As long as Bitcoin remains above $107,000, the upward trend is unlikely to change.
• Breakdown Confirmation: A decisive drop below $107,000, accompanied by high volume, would signal the end of the bullish cycle.

2. Capital Flow Analysis: Critical Signals from USDT.D

2.1 USDT Dominance Overview

The USDT dominance (USDT.D) is hovering around 4%, a key level both technically and psychologically. Historical data indicates that the 3.8% level has acted as strong support multiple times, including during the double-bottom formation in March 2024 and late December/early January 2024.

2.2 Critical Point Assessment

Key observations:

• Support Test:
  • The current 4% level is crucial.
  • If 3.8% holds, USDT.D may rebound to the 6-6.5% range.
  • A breakdown below 3.8% would mark a first in years, potentially triggering a super-cycle.
• RSI Divergence: USDT.D is showing bearish divergence, with prices hitting new highs while RSI declines, suggesting a continued decline in USDT.D dominance.

2.3 Implications of Capital Allocation

A decrease in USDT dominance typically signals:

1. Capital Rotation: Investors moving from stablecoins to risk assets
2. Increased Risk Appetite: Market sentiment shifting from cautious to aggressive
3. Liquidity Release: Providing more capital for crypto assets

If USDT.D declines from 4.5% to 3.8%, history suggests a strong recovery in the crypto market.

3. Macroeconomic Environment and Policy Impact

3.1 Monetary Policy Environment

The Fed has lowered interest rates by 100 basis points in the second half of 2024, with another 25 basis point reduction in July 2025 to a range of 4.00-4.25%. This accommodative monetary policy provides favorable support for risk assets.

Policy transmission:

• Liquidity Expansion: Low interest rates reduce the opportunity cost of holding cash.
• Weakened Dollar: The rate cuts put pressure on the dollar, benefiting Bitcoin, which is priced in USD.
• Inflation Hedge: CPI increased from 2.4% to 2.8%, highlighting the inflation-hedging properties of crypto assets.

3.2 Institutionalization Progress

Approval of Bitcoin spot ETFs in 2024 marks a key milestone in institutional adoption:

• BlackRock ETF: Attracted $15 billion in inflows since January 2024
• Grayscale's Sell-Off: Despite a $16 billion loss, overall institutional net inflows remain positive
• March Peak: ETF inflows coincided with Bitcoin’s price reaching historical highs

3.3 Political Environment Shifts

Trump's election and pro-crypto policies are creating a more optimistic market outlook:

• Regulatory Clarity: SEC Chair nomination of Paul Atkins is expected to take a more open stance on crypto.
• Policy Support: Anticipated additional crypto-friendly policy frameworks.

4. Trading Strategy and Risk Management

4.1 Range-bound Trading Strategy

In the $107,000-$124,000 range, we recommend:

• Range Trading:
  • Buy near support at $107,700
  • Sell near resistance at $117,600
  • Set stop-loss if price breaks below $107,000
• Dynamic Adjustments:
  • Confirm support effectiveness in the $107,700-$109,676 range
  • Breakout trade: If $117,600 is broken with high volume, buy toward $124,000
  • Post-breakdown: Watch for support at $100,000 and $95,000 if price falls below $107,000

4.2 Medium- to Long-Term Allocation Recommendations

• Trend-following: Maintain moderate exposure while waiting for clearer trends
• Dollar-Cost Averaging: Gradually build positions near the lower boundary of the range
• Risk Control: Limit individual stop-losses to 2-3% of total position

Key Timing:

• USDT.D Signal: Monitor the outcome of the 3.8% support test
• Macro Events: Follow Federal Reserve meetings and inflation data
• Technical Confirmation: Wait for a confirmed breakout above the $107,000-$124,000 range

5. Risk Warnings and Scenario Analysis

5.1 Bullish Scenario (40% Probability)

Triggering Conditions:

• USDT.D drops below 3.8%
• Further Fed rate cuts
• Continued ETF fund inflows

Price Targets:

• Short-term: Breakout above $124,000, targeting $130,000-$135,000
• Mid-term: In case of super-cycle, targets between $150,000 and $200,000

5.2 Bearish Scenario (45% Probability)

Triggering Conditions:

• Significant drop below the key $107,000 support
• Deterioration in the macro environment (inflation rebound, geopolitical risks)
• Unexpected regulatory tightening

Support Levels:

• Primary Support: $100,000 (psychological level)
• Secondary Support: $95,000-$92,000 (previous consolidation zone)
• Tertiary Support: $85,000 (near the 200-day EMA)

5.3 Continued Range-bound Scenario (15% Probability)

Characteristics:

• Bitcoin continues to trade within the $107,000-$124,000 range
• Volatility gradually decreases
• Awaiting a clear directional breakout

6. Conclusion and Outlook

6.1 Core Judgment

Based on a comprehensive analysis of technicals, capital flows, and the macro environment:

1. Trend Continuity: The current range-bound movement is part of a technical consolidation within a bullish trend, not a reversal.
2. Critical Levels: $107,000 is a key level for assessing the continuation of the trend.
3. Capital Flow Positive: USDT.D is approaching critical support, signaling a shift towards risk assets.
4. Favorable Macro Environment: The loose monetary policy and institutionalization process provide a solid foundation for long-term growth.

6.2 Trading Recommendations

• Short-term: Execute range trading strategies within the defined price range
• Medium-term: Maintain moderate long positions
• Risk Management: Monitor the 107,000 support level closely and adjust strategies based on macro and technical signals

6.3 Market Outlook

Bitcoin’s range-bound pattern is expected to continue until a clear catalyst emerges. The path of USDT.D, Fed policy, and ETF fund flows will be critical factors in determining the next market move. As long as the $107,000 support holds, the bullish trend remains intact, providing opportunities for traders to capitalize on market fluctuations within a controlled risk environment.

Risk Disclaimer: This report is based on publicly available market data and technical analysis for informational purposes only. It does not constitute investment advice. Cryptocurrency investments are highly speculative and carry substantial risks. Investors should make decisions based on their individual risk tolerance.

Report Date: September 24, 2025
Data Cut-off: September 24, 2025