Bitcoin (BTC) Is Entering a Period of Volatility, as Macro Effects Align for a Short-Term Rally to $111,000

Macro factors, including a potential U.S.– China trade deal and cooler-than-expected inflation figures, are aligning to support another Bitcoin (BTC) ally.

Macro factors are aligning for another Bitcoin (BTC) rally, in the short-term, to $111,000, as Jag Kooner, Head of Derivatives at Bitfinex, has shared.

A potential agreement between the U.S. and China could help reduce uncertainty and boost market sentiment, according to Kooner. However, he believes that the optimism may already be priced in, meaning the immediate impact on markets could be minimal.

Instead, the most likely near-term effect is increased volatility. The same applies to the latest inflation reading, which went up just 0.1% on a monthly basis. Together, these developments suggest that Bitcoin may be setting up for significant price action in the near future, Jag Kooner said.

“Core CPI up 0.1% m/m firms up rate cut bets, compresses real yields, and creates a vacuum above $111K for bitcoin. That move would likely be spot-driven, with ETF demand accelerating as the macro regime shifts toward easing,” Jag Kooner, Bitfinex.

Bitcoin to reach $111K: Bitfinex analyst

Lower inflation could increase the likelihood that the Federal Reserve will cut interest rates, potentially giving Bitcoin a boost. According to Jag Kooner, this theme could dominate crypto market sentiment over the next two weeks, possibly pushing Bitcoin toward $111,000, close to its all-time high.

“BTC’s tight correlation with the S&P 500 (30D r ~0.63) reveals its current role as a liquidity barometer rather than a volatility hedge. This correlation makes BTC highly sensitive to SPX range-bound conditions, and until the index breaks out, BTC’s upside remains constrained,” Jag Kooner, Bitfinex.

However, Bitcoin’s upside remains tied to stock market performance. The strong correlation with equities means that any breakout may depend on the S&P 500 moving out of its current range. If that happens, both Bitcoin and altcoins could move sharply higher, offering gains for crypto holders.