Bitcoin stabilized near $113,000 today after two consecutive days of decline, attempting to find footing as short-term traders reassess the balance between fading leverage and improving sentiment in broader risk markets.
This stabilization may offer a glimpse of recovery potential, yet it remains fragile and conditional on the persistence of supportive macro drivers.
Fundamentally, the combination of improving broader stock market sentiment, renewed trade optimism between the United States and China, and recovering inflows into Bitcoin exchange-traded funds could help restore market confidence.
However, the continued weakness in spot bitcoin accumulation and the still-elevated liquidation levels in futures markets suggest that any rebound might remain technical rather than structural.
According to The Wall Street Journal, global equity markets have entered a renewed phase of optimism as U.S. indices climbed to new all-time highs, marking consecutive sessions of solid gains. Strong corporate earnings, revived confidence in U.S.–China trade relations, and a wave of high-value mergers have all contributed to this momentum.
Earnings across sectors have largely exceeded forecasts, helping to offset earlier anxiety over regional bank vulnerabilities and tariff disputes. While this sharp improvement in sentiment bodes well for risk assets such as Bitcoin, it also introduces the risk of overheating, as speculative enthusiasm appears to be advancing faster than the underlying fundamentals.
The optimism was reinforced by progress in U.S.–China trade talks. As reported by The Wall Street Journal, both nations are nearing an agreement that could lead to Washington reducing its 20% tariffs on Chinese goods by up to half, in exchange for Beijing tightening controls over exports of fentanyl precursor chemicals.
President Trump and President Xi Jinping are expected to discuss the deal during their meeting in South Korea, following months of negotiations led by Treasury Secretary Scott Bessent. The deal is also said to include renewed Chinese purchases of U.S. soybeans and a suspension of new restrictions on rare earth exports.
If finalized, it could help stabilize global trade flows, alleviate pressure on U.S. farmers, and support a more consistent risk appetite across emerging and digital asset markets alike.
At the same time, markets are anticipating that the Federal Reserve will announce a 25-basis-point rate cut today, aligning with expectations reflected in CME futures data. Traders are watching closely for any dovish signals from Chair Jerome Powell that could reinforce the narrative of continued monetary easing.
Lower real yields and a softer dollar would generally support Bitcoin’s value proposition as an alternative asset, particularly as traditional safe-haven demand rotates toward yield-sensitive instruments.
Institutional sentiment toward Bitcoin has also shown early signs of stabilization as well. Net inflows into Bitcoin spot ETFs have recovered for the second consecutive week, with more than $350 million recorded during the first two sessions of this week, according to SoSo Value. This recovery suggests that institutional investors are cautiously rebuilding exposure following weeks of risk aversion.
Nevertheless, significant risk factors persist on many fronts. As highlighted in an opinion piece by The Wall Street Journal Editorial Board, inflation in the U.S. remains well above the Federal Reserve’s 2% target, with headline and core readings both at 3% year-on-year in September. Despite this, the White House has portrayed the numbers as progress. The Board criticizes both monetary and fiscal authorities for their roles in sustaining elevated price levels as Chairman Powell’s rate cuts have kept financial conditions loose, while President Trump’s tariffs have exacerbated cost pressures. The Editorial Board warns that Washington may be gradually normalizing 3% inflation, which could undermine long-term consumer confidence and restrain real purchasing power.
On the crypto derivatives front, the liquidation of long positions in Bitcoin futures remains high, exceeding $581 million across Monday and Tuesday. This indicates that leveraged traders are still facing margin stress, a dynamic that continues to weigh on short-term price recovery attempts. Complementing this picture, the On-Balance Volume (OBV) indicator remains near its lowest level since April, showing little evidence of reaccumulation. The absence of sustained inflows from spot buyers underscores that the market remains vulnerable to renewed selling pressure should global sentiment falter.
Altogether, Bitcoin’s stabilization around $113,000 reflects a temporary equilibrium between a cautiously improving macro backdrop and lingering internal fragility. The convergence of global optimism, trade progress, and expected monetary easing provides a foundation for recovery, but persistent inflationary risks and weak on-chain dynamics continue to temper enthusiasm. Unless renewed accumulation confirms that institutional demand is returning decisively, Bitcoin’s short-term gains may remain constrained within a fragile, range-bound structure.
