Bitcoin’s (BTC) recent correction from its all-time high of $126,100 to current levels around $104,500 may mask a more constructive macro environment that could accelerate the path toward the higher upside.

While derivative markets underwent historic deleveraging with $19 billion in futures open interest wiped out, several macro developments are aligning to support crypto’s next leg higher.

The Federal Reserve’s dovish pivot, a weakening dollar, gold’s record rally to $4,300, and potential Bank of Japan policy shifts create a backdrop that could drive Bitcoin through the critical $130,000 resistance level that 21Shares’ Matt Mena identifies as the gateway to $150,000.

Dollar weakness opens the door

The Dollar Index (DXY) has declined 0.5% this week, falling from Oct. 14 through Oct. 16, creating favorable conditions for risk assets.

A weaker dollar typically serves as a tailwind for Bitcoin through the global liquidity channel, with sustained DXY slippage often coinciding with stronger spot demand and narrower ETF discounts.

Lower-for-longer interest rate expectations from the Fed further support this dynamic by pulling real yields and the dollar down, easing financial conditions, and supporting ETF inflows.

The FOMC meeting this month looms as a potential catalyst, though excessive dovish positioning could create “buy the rumor, sell the news” dynamics.

Manufacturing data is important, as a continued display of weakness while price gauges remain sticky creates rate-path uncertainty, which typically keeps Bitcoin range-bound until the data skews clearly dovish.

Additionally, gold’s surge to over $4,300 all-time highs reinforces the debasement narrative that Bitcoin proponents have long championed.

Institutions framing Bitcoin as “digital gold” may add positions on relative-value grounds, though flows can lag as risk managers often allocate to bullion before rotating to crypto beta.

The precious metals rally validates concerns about currency

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Author: Gino Matos