Bitcoin is currently navigating a crucial period as it trades at pivotal levels following a subdued weekend. Bulls have managed to defend key support zones, though they appear to be struggling to generate new upward momentum. The market’s eyes are set on the upcoming decision by the US Federal Reserve regarding interest rates, scheduled for this Wednesday. A potential 25-basis-point cut is widely expected, signaling a gradual shift rather than a drastic turn in monetary policy. Such a move could inject optimism into risk assets, including cryptocurrencies, as it suggests a more favorable financial environment without inciting fears of economic slowdown.
The Shift to HODL Mode
Amid this tense environment, Bitcoin’s trading dynamics are undergoing notable shifts. According to data from CryptoQuant, there’s a growing trend of Bitcoin moving into “HODL mode,” with a significant supply shifting from exchanges to long-term storage. This suggests that conviction-driven holders are accumulating rather than selling, thus reducing the liquidity available in the market. As macroeconomic catalysts and strengthening on-chain fundamentals converge, this week could prove pivotal for Bitcoin’s trajectory.
Decline in Spot Trading Volumes
A significant development in the cryptocurrency market is the sharp decline in Bitcoin’s spot trading volumes. In January 2025, spot trading volumes reached a peak of $636 billion, but by August, that number had nearly halved to $322 billion. This decline reflects a broader market transition, with participants moving away from active speculation toward long-term accumulation strategies. Exchange data backs this trend, showing consistent outflows as Bitcoin is transferred into private wallets and cold storage, highlighting a growing belief in Bitcoin’s long-term value over short-term gains.
Balancing Act: Reduced Volumes and Macroeconomic Influences
For Bitcoin, the combination of reduced spot activity and the looming anticipation of the Fed’s decision creates a delicate balance. On one hand, the decreased selling pressure from sidelined traders could support price stability. On the other, thin liquidity raises the possibility of sharper price swings once volatility re-emerges. As Bitcoin hovers near critical price levels, the coming days may reveal whether this HODL-dominated environment lays the groundwork for resilience or if macroeconomic forces will prompt a more significant revaluation across the crypto market.
Technical Landscape: Consolidation and Key Levels
Bitcoin is currently trading around $114,987, showing signs of consolidation following a rebound from early September lows near $110,000. Technical analysis reveals that Bitcoin has reclaimed the 50-day simple moving average (SMA) at $114,399 and the 100-day SMA at $112,681, reinforcing a short-term bullish outlook. These moving averages now serve as immediate support levels, indicating renewed buyer momentum. However, a key resistance remains at the $116,000–$117,000 range, where Bitcoin has struggled to achieve a sustained breakout. A successful close above this threshold could pave the way for a retest of the cycle high at $123,217, a significant barrier since July that bulls will need to overcome.
On the downside, support is found around $112,500, aligning with the 100-day SMA. A breach below this level could reopen the risk of revisiting $110,000, which has served as a crucial support floor. Further down, the 200-day SMA at $102,652 acts as the ultimate safety net in the event of deeper corrections.
Looking Ahead: A Pivotal Week
As Bitcoin embarks on this decisive week, the interplay between reduced trading volumes and macroeconomic developments will be crucial. The anticipated Federal Reserve decision could set the tone for risk assets, potentially igniting fresh momentum if the market interprets the rate cut as a supportive measure. Meanwhile, the ongoing shift toward long-term holding could provide a stabilizing force, especially as Bitcoin navigates through critical technical levels. Whether Bitcoin’s current consolidation phase serves as a launchpad for renewed gains or a precursor to further volatility remains to be seen. Nonetheless, this week promises to be a telling one for Bitcoin and the broader crypto market.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
