The crypto market took a double hit: the Senate buried a major crypto regulation bill, and the Fed raised the federal funds rate in mid-September. By logic, Bitcoin should have been knocked down. Instead, BTC/USD briefly climbed above $87,000, extending its rebound for a third consecutive week and closing the best quarter since late 2024 with a gain of about 43%.

The largest cryptocurrency added roughly 1% for the week as strong institutional flows into ETFs kept demand intact. The cycle bottom formed back in June–August, when the token lost more than half from the record above $126,000. The current rally is aimed at restoring the trend.

Capital flows into Bitcoin ETFs

A bullish factor for Bitcoin is its resilience to bad news. Apollo Crypto argues that record?low sentiment two months earlier has turned the recent price drop into a buying opportunity.

A weak US jobs report also helped Bitcoin by shifting expectations toward a pause in the Fed's tightening cycle. The rally coincided with a seasonal effect: BTC/USD has risen in October in 10 of the last 15 years, although last year's 7% drop after the record price was particularly painful.

Regulatory delays in the US remain an adverse factor. Congress' slow progress on crypto rules is holding back ETF inflows.

Derivatives market caution is another headwind for BTC/USD. Traders have stayed on the sidelines after several waves of large liquidations in recent months. K33 notes that a rare orderly unwind of positions typically precedes low forward volatility, but it does not provide a clear directional signal.

Recent sharp price moves were driven by the rapid collapse of leverage in the perpetual?futures market. A record wave of short liquidations at the end of August triggered an unexpected squeeze when short sellers were forced to buy back the token. Tagus Capital highlights that speculative leverage has been almost entirely flushed out and open interest has fallen to its lowest level since March.

Deribit data point to a bullish short?term outlook for Bitcoin. At the same time, traders are building hedges around $70,000 to protect against a retracement rather than betting against the rally. Bitget Wallet reminds investors that strong October macroeconomic prints alone are not sufficient reason to buy.

In summary, Bitcoin is supported by resilience to negative news, the October seasonal effect and expectations of a Fed pause. Pressures on the largest crypto come from derivative market caution and US regulatory delays.

Technically, on the daily chart, BTC/USD shows bulls attempting to restore the uptrend. A bounce off fair value near $83,900 would be a reason to add long positions.