Daily Crypto Signals: Bitcoin Flirts with $121K, Ethereum Eyes $4.5K Breakout Amid Digital Euro Developments
Bitcoin approached the $121,000 mark on Thursday, reaching its highest level in seven weeks, while Ethereum signaled a potential local base
Quick overview
- Bitcoin approached $121,000, marking its highest level in seven weeks, while Ethereum indicated a potential local bottom at $3,900 with expectations of an 80-100% rally.
- The European Central Bank announced partnerships for its digital euro project, while Sweden's parliament proposed exploring a national Bitcoin reserve to combat inflation.
- Plasma's token experienced a dramatic price drop, leading its founder to deny insider selling allegations amidst community concerns.
- Analysts suggest Bitcoin's rise is supported by improved macroeconomic conditions and a potential drop in interest rates, with a target of $125,000 in sight.
Bitcoin BTC/USD approached the $121,000 mark on Thursday, reaching its highest level in seven weeks, while Ethereum ETH/USD signaled a potential local bottom at $3,900 with technical patterns suggesting an 80-100% rally ahead. Meanwhile, the European Central Bank announced technology partnerships for its digital euro project, Sweden proposed exploring a national Bitcoin reserve, and Plasma founder Paul Faecks denied insider selling allegations following a dramatic token price collapse.
Crypto Market Developments
This week, the crypto market saw a lot of movement as a number of events came together to affect how investors felt. The European Central Bank took real moves toward building a digital euro by signing framework agreements with seven tech companies, such as Feedzai, which uses AI to find fraud, and Giesecke+Devrient, which makes security technologies.
These partners will take care of important tasks including managing fraud and risk, securely sharing payment information, and making software for the possible central bank digital currency. The system will have a “alias lookup” feature that lets users send and receive digital euros without having to know the specifics of the payment service provider. Giesecke+Devrient will also design the system to work offline for payments.
Two members of the Swedish Democrats party in the Swedish parliament suggested that Sweden look into setting up a strategic Bitcoin reserve to fight inflation and diversify the country’s holdings. Dennis Dioukarev and David Perez said that Sweden should “participate in this digital arms race” because other countries, especially the United States, are doing the same thing. The MPs said that seized Bitcoin may be used to fund the reserve, but they also said that it is yet unclear who will be in charge of the reserve.
There was also a lot of talk about Plasma, a layer-1 blockchain that was made to make stablecoin payments cheaper and faster. The token rose to about $1.70 after the mainnet beta and native XPL token were released on September 25. By Wednesday, it had dropped more than 50% to $0.83. People in the community thought the team was selling time-weighted average price, and independent analyst ManaMoon found that over 600 million XPL tokens had moved from the Plasma team vault to exchanges. Founder Paul Faecks strongly refuted the claims, saying that the allocations for investors and teams are locked for three years with a one-year cliff. He further said that “no team members have sold any XPL.”
Bitcoin Price Prediction: $125 Next Target?
This week, Bitcoin showed a lot of power, flirting with the $121,000 level on Thursday, which was its highest position in seven weeks. Between Wednesday and Thursday, more than $313 million worth of leveraged short bets were liquidated, which set the stage for a possible short squeeze because bearish traders were taken off guard. Bulls say that the present market is much stronger than it was in mid-August, when BTC briefly hit $124,000. They point to lower fears of a recession and support from gold markets as reasons for this.
The cryptocurrency’s rise has been helped by better macroeconomic conditions and changing expectations from the Federal Reserve. The most recent US Personal Consumption Expenditures Price Index showed a 2.9% rise from August, which was in line with what analysts had predicted and eased worries about inflation. This information made traders feel sure that the Federal Reserve will keep cutting interest rates. The CME FedWatch tool showed that there was a 40% chance that rates would drop to 3.50% or lower by January 2026, up from just 18% in mid-August.
Bitcoin’s rise in October came at the same time as a 16% rise in gold prices over six weeks, and World Gold Council data shows that central banks are steadily buying more gold. In the middle of August, gold was stuck around $3,400 and trade tensions were rising around the world. But now, inflation risks are lower, which is good for other assets like Bitcoin. Analysts say that Bitcoin’s journey to $125,000 looks more likely as investors become more sure that interest rates will go down and see less risk in stock market declines.
Ethereum Gearing Up to Break $4,500
Ethereum seems to have found a local bottom at $3,900. Technical experts have seen the resumption of the Power of 3 pattern, also known as the Accumulation-Manipulation-Distribution configuration, which took ETH from $2,000 to $4,900 between May and June. The most recent structure shows that purchasers bought between $4,800 and $4,200 before prices quickly dropped below $4,000. This was seen as a planned liquidity sweep that cleared external liquidity around $4,180. This correction fit with a daily fair value gap, which strengthened the bullish story instead than weakening it.
Both the 25-day and 50-day simple moving averages are acting as near-term resistance, which is a good sign for the future. The most important next step is to get a clear daily close above $4,500. This would provide Ethereum a strong base for its future rise. As Q4 goes on, analysts think there might be a breakout of 80–100%, similar to the big gains witnessed earlier in the year. The recent low around $3,900 is starting to look more and more like a floor price.
But the data on derivatives paints a mixed picture. Even while Ethereum’s open interest and futures cumulative volume delta only went up a little bit during the surge, which was about 15% a week, spot CVD went down a lot. This suggests that the rise is not yet driven by leverage. This shows that there is net aggressive selling on spot markets, which is a typical bearish divergence that could mean that larger investors are selling off their holdings and that whipsaw volatility is coming. A major area of interest is between $4,100 and $4,250, where there is a lot of internal liquidity and volume inefficiencies. If bullish momentum doesn’t stay over $4,500 in the next few days, this area could be an important retracement target or support area for price re-entry.
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