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Key Takeaways:
- Bitcoin options traders are targeting $126K despite short-term volatility.
- Rate cut expectations in September may provide a liquidity boost for BTC.
- Analysts view the recent pullback as healthy, not a sign of market capitulation.
Bitcoin (BTC) is showing signs of resilience after a volatile week, as options traders and analysts set sights on a potential rally toward $126,000.
BTC Pullback Seen as Healthy Correction
After briefly dipping to $112K to fill CME gap levels, Bitcoin has bounced back to test the $115K resistance zone. While facing rejection at this key level, analysts at QCP Capital believe the move is a correction rather than capitulation. The firm points to historical patterns where sharp liquidations—over $1 billion last Friday—often reset leverage and precede fresh accumulation phases.
The July monthly close marked a record high for Bitcoin, bolstering confidence in a sustained bullish trajectory.
Options Market Signals Bullish Bias
Bitcoin options activity reflects rising bullish sentiment. Traders are actively buying 29 August 2025 call options at strike prices of $118K, $124K, and $126K, showing confidence in potential new all-time highs. QCP noted that although front-end put skew remains elevated, it hasn’t triggered panic signals. A decisive move above $115K could normalize skew and reignite upward momentum.
Key structural and macro tailwinds—including growing stablecoin adoption, institutional tokenization interest, and clearer regulatory signals—are adding to the optimism.
Fed Rate Cut Expectations Add Liquidity Tailwind
Weaker U.S. labor market data, with a downward revision of 250,000 jobs in prior months and disappointing July numbers, has sparked increased expectations for a Fed rate cut. According to the CME FedWatch Tool, the odds of a September rate cut now stand above 80%, up from 39% just a week prior.
Also Read: Bitcoin to $1.5M? Cathie Wood, Michael Saylor, and Tom Lee Say Institutional FOMO Is Just Beginning
Such a pivot from the Federal Reserve would inject much-needed liquidity into markets, supporting risk assets like Bitcoin. Veteran investor Robert Kiyosaki has reiterated his bullish stance, hinting he would buy more BTC on any further dip.
Despite near-term resistance, the confluence of technical resets, bullish options activity, and macroeconomic support positions Bitcoin for a potential breakout. Traders and investors alike are watching ETF inflows and volatility compression for the next major signal.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
