After a week of sharp reversals that unsettled both bullish and bearish traders, analysts say bitcoin’s rebound to $111,000 has reignited talk of a potential breakout above $120,000. A shift in whale positioning, combined with supportive macro indicators and renewed risk appetite, is fuelling speculation that the market may be preparing for its next major upward leg.

While volatility remains high, on-chain and institutional signals hint that the recent turbulence might not represent indecision but rather strategic accumulation ahead of a larger move. 

Key takeaways

• Bitcoin bounces back to $111K after dropping below $107K midweek, forming a classic whipsaw pattern.
  
• Whale traders close significant short positions, suggesting a potential reversal in market direction.
  
• Bitcoin miners are diverging from BTC’s price performance, redirecting focus toward AI infrastructure.
  
• Mid-sized holders continue accumulating, underscoring steady confidence in long-term fundamentals.
  
• Markets anticipate two further Fed rate cuts in 2025, creating favourable conditions for risk assets.
  
• A clean break above $112K could mark the beginning of a sustained uptrend ahead of CPI data releases.
  

Bitcoin’s volatile setup: Chaos or the start of a new trend?

Bitcoin’s rollercoaster week saw prices dip below $107,000 before quickly rebounding above $111,000 - a hallmark of a whipsaw market. This pattern often traps trend-followers, forcing rapid reversals on both sides.

The bounce coincided with a U.S. presidential pardon for Binance founder Changpeng “CZ” Zhao, which the market interpreted as a signal of improving crypto regulation. A concurrent 1% rise in the Nasdaq helped strengthen sentiment ahead of Friday’s crucial Consumer Price Index (CPI) report.

Despite the volatility, Bitcoin’s recovery above the $111K mark points to robust underlying demand. For traders using Deriv MT5, this reinforces the importance of flexible position sizing and stop-loss precision in fast-moving markets.

Bitcoin whale accumulation: Whales flip from shorts to longs

The clearest signal comes from large-scale traders - or whales - who often move before broader market participants.

According to Lookonchain, whale “Bitcoin OG” closed a 2,100 BTC short position worth $227.8 million, locking in $6.4 million in profit before flipping to a long position.

Another major trader, 0xc2a3, ended a short trade with $826K in gains and initiated a $45 million long, already showing positive unrealised returns.

These moves signal that influential traders are positioning for an upside continuation rather than further downside. Historically, similar reversals in whale sentiment have coincided with the start of new mid-term rallies.

For traders on Deriv MT5, monitoring on-chain activity like this can provide valuable confirmation signals to complement technical setups seen on price charts.

Bitcoin miner AI adoption as miners decouple from price

A recent JPMorgan report highlights that Bitcoin mining companies’ market capitalisations have surged since July, even as Bitcoin’s price has remained relatively range-bound.

This divergence is driven by a strategic pivot toward artificial intelligence (AI) operations, offering steadier income compared to Bitcoin’s cyclical block rewards. Following the April 2024 halving, which reduced mining rewards from 6.25 BTC to 3.125 BTC, production costs climbed to roughly $92,000 per coin, with projections reaching $180,000 by 2028.

Many miners have since diversified into AI-driven data infrastructure to offset rising costs and revenue uncertainty. This evolution could reduce forced Bitcoin selling, supporting price stability during volatile phases. Traders analysing BTCUSD on Deriv MT5 will note that miner adaptation may now be acting as a stabilising influence on broader market dynamics.

Dolphins keep accumulating: Mid-sized holders signal confidence

Beyond the whales, dolphins - investors holding between 100 and 1,000 BTC - are quietly reinforcing Bitcoin’s long-term foundation.

Data from CryptoQuant shows these entities have added over 907,000 BTC to their holdings this year, even after a $19 billion market liquidation earlier this month.

While short-term data suggests some moderation in accumulation, the overall trajectory remains bullish. This pattern - sustained long-term buying despite short-term caution - has historically preceded major rallies, hinting that market confidence remains intact beneath the volatility.

For data-focused traders, such accumulation trends often serve as a leading indicator of resilience, signalling growing conviction among informed holders.

Macro tailwinds: Rate cuts, inflation, and the safe-haven shift

The upcoming September CPI release is the final major macro event before the Federal Reserve’s next policy meeting. Markets currently anticipate a 25-basis-point cut next week and another in December, reflecting expectations of a gradual easing cycle.

Lower interest rates generally weaken the dollar and enhance the appeal of assets like Bitcoin, which benefit from expanding liquidity. Around $7.5 trillion remains parked in U.S. money market funds; as yields decline, part of this capital could shift into alternative stores of value.

This environment mirrors gold’s historical pattern - where stabilising inflation and falling real yields drive demand for scarce assets. For multi-asset traders on Deriv MT5, this reinforces Bitcoin’s position as a potential “digital gold” hedge within a diversified portfolio.

Bitcoin technical insights

Bitcoin continues to trade within a tight range of $110,300–$110,600, where resistance has limited short-term upside. A confirmed breakout above $110,600 could open the path toward $124,000, while support near $107,200 remains critical to prevent deeper retracements.

The RSI is edging closer to the neutral 50 mark, signalling improving momentum. Although a decisive bullish reversal has yet to materialise, decreasing selling pressure and renewed whale accumulation point toward strengthening buy-side activity.

Bitcoin investment implications

Bitcoin’s overall market structure points to the potential for a medium-term breakout.

• Short-term: Buying opportunities may emerge near $110K–$111K with tight stop losses below $105K, especially if upcoming CPI data supports a softer inflation narrative.
  
• Medium-term: Strategic accumulation remains appealing as macro policy shifts dovish and institutional flows strengthen.
  
• Equity correlation: Bitcoin miners diversifying into AI could outperform traditional crypto assets due to more balanced revenue streams.
  

For traders and investors on Deriv MT5, staying alert to key macro announcements and technical breakout signals can help position portfolios ahead of potential momentum shifts.

Bitcoin market scenarios and outlook

If Bitcoin consolidates above $111,000 and inflation data comes in soft, a retest of $120,000 in the coming weeks remains likely. Alternatively, a hawkish CPI print could prompt a temporary correction before the longer-term uptrend resumes.

Either way, the underlying structure - defined by whale accumulation, miner strength, and improving liquidity - continues to support a bullish medium-term outlook. Traders can track these dynamics in real time via charting tools and indicators available on Deriv MT5.

‍