According to Woofun AI, after the Federal Reserve completed the interest rate hike on September 16, the Bitcoin (BTC) price was not only unsuppressed, but instead recorded a significant increase of about 13%. Wall Street funds became the leading force driving this reversal of the market.
This counterintuitive market performance marks a temporary break in the traditional negative correlation between macro-austerity expectations and crypto asset prices. The rapid return of capital after implementation of the policy revealed a fundamental shift in market sentiment.
The core logic driving the return of capital is, above all, the elimination of uncertainty. As of September 11, interest rate futures data showed that the probability of another rate hike in September was as high as 69.6%. This high probability expectation led to a large outflow of funds previously to avoid risks.
However, as the “Clarity Act”, which aims to regulate the US cryptocurrency industry on September 15, was not passed in the Senate by a narrow margin of 50 votes to 49, the market ran out of short-term weakness. Bitcoin fell 3.3% on the same day, and the closing price was close to $75,600. This price just formed the low point of the 'right shoulder' pattern in the price trend. The next day, the Federal Reserve officially raised the target interest rate range to 3.75% to 4%. The end of the waiting period freed funds that were withdrawn before voting from waiting for the outcome of the decision, thereby releasing the will to re-enter the market.
The more critical variable is that the market has become desensitized to a high interest rate environment. The two-year US Treasury yield is a key measure of borrowing costs. It usually rises when traders expect further interest rate hikes and falls when they expect interest rate cuts. According to data compiled by Woofun AI, the yield hit a September high of 4.76% on September 18 and September 21, which is exactly the day when Bitcoin experienced two rounds of sharp increases. Fundstrat's Tom Lee pointed out that the Federal Reserve is unlikely to take a more hawkish stance thereafter, and this expectation has strengthened buyers' tolerance for a high interest rate environment.
Technological breakthroughs and huge capital inflows together form the third biggest driver. The UTXO actual price distribution chart reveals the cost distribution of holders, with the region around $87,100 accounting for 1.34% of Bitcoin's total supply, and the area around $88,400 accounting for 0.46%. The number of positions held within these ranges is relatively small, which means there is less pressure on holders waiting to close their positions to sell near this price, clearing up barriers to price increases. Capital flow data further confirms this trend: Bitcoin spot ETFs attracted a cumulative inflow of $2.31 billion between September 17, 18, 21, and 22. Specifically, the fund bought $433 million of Bitcoin on September 18, driving the price up 5.9%; on September 21, the purchase volume surged to $999 million, and the price rose 6.7%.
As of September 22, Bitcoin's cumulative increase of 13.2% was almost entirely contributed by these two increases. Strong gains on September 21 also triggered bear stampedes, and the $262 million short position was forced to close within an hour. This passive buying further boosted demand. Supported by the highest daily trading volume since August 21, Bitcoin successfully broke through the 'neck' of the 'inverted shoulder' pattern formed since February. Subsequent market performance showed strong resilience. The retracement on September 22 was only 0.5%, far lower than the 3.3% decline on September 15, indicating that bulls have taken the lead.
Looking ahead, the technical chart shows a clear upward path and key support levels. The first resistance level was at $86,935. Bitcoin hit this level but was unable to stabilize. If the price closes here, the next target will be at $89,825, challenging $93,940. According to this trend model, from the “neck line”, Bitcoin has about 43% room to rise, and the theoretical target price can reach $117,247. This value is only 7% different from the all-time high of $126,080.
The support system is also solid. The area around $84,569 accounts for 2.92% of the total supply, is the region with the largest share in the 20% fluctuation range, and is slightly above the $84,045 technical support level. If the daily close falls below $84,045, the 'neckline' support will move down to around $82,000. Analysts believe that even if two-year US Treasury yields remain high, continued fund purchases indicate that the panic has subsided. If the August inflation data released on September 30 fails to re-trigger market turmoil, as long as the price stays above $86,935, there will still be effective room for a 43% increase.