Bitcoin faces a critical juncture in 2025, as the U.S. dollar’s weakening and a potential Fed rate-cutting cycle are increasingly cited as possible catalysts for a price tipping point. Market participants are closely watching how Bitcoin navigates its weakest month of the year—September—which historically sees an average return of -3.5% for BTC/USD over the past 12 years. With the cryptocurrency recently dipping below $107,000 and marking its fourth consecutive “red” August, concerns are rising that the price could test key psychological support levels such as $100,000 [1].
The current market environment shows a divergence between Bitcoin and traditional safe-haven assets like gold, which is nearing record highs. Analysts point to gold’s breakout as a bearish signal for Bitcoin, with one prominent gold advocate, Peter Schiff, emphasizing the growing preference for physical gold over “digital gold.” This shift reflects broader investor sentiment, particularly as U.S. economic uncertainty mounts amid debates over Trump-era tariffs and the Federal Reserve’s impending rate decisions. The Fed has been on a pause since August 2024, but the probability of a 0.25% rate cut at the September 17 meeting is currently priced at over 90% [2].
Structural data also signals a tightening of Bitcoin’s supply. Exchange reserves have been declining since early 2024, with spot ETFs now holding over 1.3 million BTC and reducing on-chain liquidity. The Network Value to Transaction (NVT) ratio has dropped by 23% to 23.7, indicating stronger network activity relative to Bitcoin’s market capitalization. These fundamentals suggest that while the short-term price action appears bearish, the structural underpinnings of Bitcoin remain intact [3].
The U.S. dollar’s weakness could further support Bitcoin’s price movement. The negative correlation between BTC and the U.S. Dollar Index (DXY) has fallen to -0.25, the lowest in two years. With the dollar projected to weaken by as much as 8% in 2025 due to Fed easing, Bitcoin is likely to benefit as a hedge against inflation and a liquidity-driven investment. Additionally, the Fed’s dovish stance could trigger a broader risk-on environment, benefiting not just Bitcoin but the entire crypto market [4].
Despite these potential tailwinds, Bitcoin’s short-term price trajectory remains volatile. Institutional buying has plunged to its lowest level since early April, with ETF outflows in August totaling $750 million. On-chain data reveals a high concentration of short positions between $112,000 and $115,000, making a short squeeze scenario increasingly likely if the price rebounds. Analysts are divided on the likelihood of a sustained rally above $114,000, with some suggesting that a retest of $100,000 may be necessary before a meaningful upside breakout [5].
Looking ahead, strategic price zones will define the immediate outlook. Support is concentrated at $107,000 and $104,000, while a break above $114,000 could open the path to $120,000 and $124,500. If the current weakness persists and Bitcoin fails to reclaim the Short-Term Holder Realized Price, a deeper correction toward $86,000 is possible, mirroring the February price drop. Nonetheless, the medium-term outlook into Q4 is cautiously bullish, supported by potential Fed easing, declining exchange reserves, and ETF flows. Long-term fundamentals—tightening supply, growing institutional adoption, and evolving BTCfi innovation—suggest that Bitcoin is well-positioned to challenge all-time highs again [6].
Source: [1] BTC vs. ‘very bearish’ gold breakout (https://cointelegraph.com/news/btc-vs-very-bearish-gold-breakout-5-things-bitcoin-this-week) [2] BTC vs. ‘very bearish’ gold breakout (https://cointelegraph.com/news/btc-vs-very-bearish-gold-breakout-5-things-bitcoin-this-week) [3] BTC vs. ‘very bearish’ gold breakout (https://cointelegraph.com/news/btc-vs-very-bearish-gold-breakout-5-things-bitcoin-this-week) [4] Bitcoin Price Forecast: BTC-USD Targets $107K–$124K Levels (https://www.tradingnews.com/news/bitcoin-price-forecast-btc-usd-weighs-107k-usd-support-vs-124k-usd-upside) [5] Bitcoin Price Forecast: BTC-USD Targets $107K–$124K Levels (https://www.tradingnews.com/news/bitcoin-price-forecast-btc-usd-weighs-107k-usd-support-vs-124k-usd-upside) [6] Bitcoin Price Forecast: BTC-USD Targets $107K–$124K Levels (https://www.tradingnews.com/news/bitcoin-price-forecast-btc-usd-weighs-107k-usd-support-vs-124k-usd-upside)
