Key Takeaways
A 25 bps rate cut looks more likely in September and could set the pace for BTC to rally higher. Option traders eyed an upside target of $130K with a potential bottom at $105K.
Bitcoin’s [BTC] pullback has extended to 9%, sliding from a record high of $124K to $112.5K, cracking below a key 2025 trendline support.
However, the 9% retracement was still within the bull-market levels of 10%-30%. Which begs the question – Is the current market bloodbath worth buying for potential September gain?
Will $110K-$123K range hold?
Source: BTC/USDT, TradingView
On the price charts, the 2025 trendline cycle was cracked, and now all eyes will be on the $110K-$112K support.
The price zone doubled as a previous peak in Q2, and defending it as support could confirm the uptrend continuation. With the OBV also at a key support, this could be a make-or-break for bulls in the near term.
When zoomed out, however, the main macro catalyst will be the Fed rate cut. At the time of writing, the market consensus (85%) leaned towards a 25 bps rate cut in September.
Source: CME Fed Watch
Fed’s chair Jerome Powell’s stance during the upcoming Jackson Hole Symposium will offer more clues on the rate cut expectations.
But Coinbase’s Head of Research, David Duong, noted that the September rate cut will be more likely.
Assuming that the rate cut happens and risk assets get a boost, how will BTC be impacted?
In the past 24 hours, the highest call buying (bullish bets) targeted $115K, $130K and $200K for the end of September Option expiry.
Source: Amberdata
At the same time, puts (bearish bets) for $110K and $105K were the most scooped, marking them as key potential price floors.
Besides, the short-term holders were now selling at a loss, a capitulation that marked a ‘buy the dip’ zone in the past.
Source: Checkonchain
Overall, if a September rate cut happens and risk assets rebound, the current market bloodbath could be worth buying. The upside targets would be the recent highs at $124K and $130K, also eyed by Option traders.
However, a sustained drop below $105K and $100K would invalidate the September’s bullish thesis described above.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion