This article is based on WikiBits livestream on October 22. The key takeaway in one sentence: The Federal Reserve holding rates steady does not mean rate cuts, let alone a return to monetary easing. With BTC trading sideways for a month, this is not the time to blindly bet on a rally. It is time to wait for confirmation from both capital flows and price action before deciding which direction the market is heading.
1. First, Let‘s Correct a Common Misconception: Why Can Holding Rates Steady Actually Be Bearish？
When people hear that the Fed will not raise interest rates next week, their first reaction is often: Isn’t that bullish？ Liquidity pressures should ease, so Bitcoin ought to rise.
In theory, there is some truth to that. The higher interest rates are, the more attractive low-risk assets such as cash and short-term Treasury bills become. Bitcoin pays no interest and is highly volatile, making a high-interest-rate environment unfavorable for its valuation. As a result, a rate pause may lead some investors to wonder whether the worst is finally over.
But financial markets do not trade solely on whether rates are raised or held steady today. They trade on how the future interest-rate outlook compares with what the market had already priced in.
Consider a simple example: A patient who normally receives an injection every day is told by their doctor, “You won‘t need one today.” Does that mean the patient is cured？ Not necessarily. They still need to hear what the doctor says next. If the doctor adds, “We’ll skip today, but you may need a higher dose in a few days,” then skipping the injection today is not necessarily good news.
The same principle applies to the Federal Reserve.
Pausing rate hikes does not mean ending monetary tightening. Ending rate hikes does not mean rate cuts are coming immediately.
If the market expects the Fed to pivot toward monetary easing, but the post-meeting message is that inflation remains too high and another rate hike in December is possible, the dollar could strengthen, Treasury yields could rise, and both equities and crypto assets could come under pressure—even if the Fed does not raise rates this time.
That is why one point deserves repeated emphasis: Markets trade on changes in expectations, not just on headline decisions.
So do not automatically translate “no rate hike” into “Bitcoin is going up.” What really matters is the Feds assessment of inflation, employment, and the future path of interest rates. The decision itself is only part of the story; the wording and the shift in market expectations are what count.
2. BTC Has Been Trading Sideways for a Month. What Is the Market Waiting For？
A sideways market has no inherent directional bias. The key questions are not simply how long the market has been moving sideways, but where it is consolidating, how trading volume is changing, and whether the price can hold after a breakout.
The livestream highlighted three important price levels to watch.
First, around $88,000: a cost-basis resistance zone.
Investors who bought Bitcoin over the past 6–12 months have a significant concentration of cost basis around this area. Imagine an investor who bought BTC at $88,000 and then watched the price fall to $82,000. That position is underwater. If Bitcoin rebounds to around $88,000, the investor may think, “I‘m finally back to breakeven. I’ll sell first and worry about the rest later.”
When many investors have similar cost bases, potential selling pressure can build around that level. This does not mean Bitcoin is guaranteed to fail at $88,000. It means a sustained move higher requires enough fresh buying demand to absorb the coins sold by investors looking to break even.
Second, around $81,500: a cost-basis reference for U.S. spot Bitcoin ETFs.
This level can help assess the overall position of investors holding Bitcoin through ETFs. When the price trades above it, ETF holders are generally in a more favorable unrealized-profit position. A sustained move below it could raise concerns about mounting losses and potential redemption pressure.
However, the average ETF cost basis is neither a hard price floor nor a level at which every institution will automatically buy or sell. The more important questions are whether fund flows continue to deteriorate after a breakdown and whether inflows recover once the price moves back above this level.
Third, around $80,000: an area to monitor for order-book buying interest.
Markets often refer to large buy orders as “support.” But orders can be canceled, and aggressive sell orders can sweep through them in a short period.
Therefore, $80,000 can indicate that buyers are showing interest at that level, but it does not guarantee that those orders will be executed or that the price will hold.
Capital flows matter even more.
U.S. spot Bitcoin ETFs recorded substantial inflows on October 19, but flows weakened again on October 20. For October as a whole, net outflows remained. This suggests that institutional demand has been inconsistent rather than a steady, one-directional wave of buying.
A single day of inflows worth hundreds of millions of dollars deserves attention, but the direction of flows over several consecutive weeks is much more informative.
The most important signals to wait for now are:
Sustained inflows into spot Bitcoin ETFs.
A recovery above key cost-basis levels.
A successful retest that holds those levels as support.
A breakout is a price event. Holding above the breakout level suggests market acceptance. Holding above it while capital flows in provides stronger evidence of genuine demand.
These are three different things and should not be confused.
3. ETFs and On-Chain Data: Who Is Buying, and Who Is Selling？
In the current market, looking at candlestick charts alone is not enough. Capital flows also matter.
ETF Flows: One Day of Large Inflows Does Not Mean the Institutional Bull Market Is Back
A large daily inflow could reflect institutions buying the dip, temporary position adjustments, or differences in allocation decisions among funds. Likewise, a single day of outflows does not mean institutions are exiting the market across the board.
Three time frames are more useful:
Three to five consecutive trading days: Is short-term buying demand holding up？
Two to four consecutive weeks: Are capital flows genuinely recovering？
Price action alongside flows: Does BTC rise when money comes in, and does it fall when money flows out？
The relationship between capital flows and price action can provide more useful evidence than either metric viewed in isolation.
On-Chain Data: Why Could Selling Pressure Reappear Around $88,000？
Cost-basis analysis attempts to estimate whether different groups of Bitcoin holders are sitting on unrealized profits or losses.
When the price rebounds toward the cost basis of a large number of investors, some may take profits while others may sell to break even. Both behaviors can create selling pressure.
However, cost-basis distribution is not an exact map of future sell orders. A single address may be controlled by multiple people, and an on-chain transfer may simply reflect a wallet migration rather than an intention to sell. Cost-basis data should therefore be cross-checked against exchange net flows, spot trading volume, and price action.
There is one encouraging sign: Loss-driven selling by long-term holders has eased compared with earlier periods. But this alone is not enough to confirm that a market bottom is in place.
There are at least two possible explanations for declining loss-driven selling.
One is that many potential sellers have already exited, reducing the available supply and easing selling pressure.
The other is that prices have merely stabilized temporarily. If BTC breaks below a major cost-basis level again, holders who have not yet sold may still decide to cut their losses.
Three other indicators are also worth watching: Bitcoin balances on exchanges, stablecoin supply, and leverage.
Exchange BTC balances: A sustained increase alongside weakening prices may indicate rising potential selling pressure.
Stablecoin supply: An increase may suggest improving potential buying power, but it does not mean that all the new stablecoins will be used to buy Bitcoin.
Leverage: The longer the market trades sideways, the more tempting it becomes for traders to anticipate an imminent breakout and increase their positions. If the price moves in the opposite direction, forced liquidations can follow. Those liquidations generate market orders, potentially pushing prices even further and triggering additional liquidations.
This is how a liquidation cascade develops.
So, when assessing the risk of a sharp decline, do not ask only whether the fundamentals have deteriorated. Also ask: Are bullish positions becoming excessively crowded？ If key support breaks, could a wave of forced liquidations follow？
4. The Bitcoin Halving Cycle: A Reference Point, Not a Timetable
Many investors use Bitcoins halving cycle to assess whether the market is bullish or bearish. But the livestream emphasized an important distinction: Halvings help explain changes in new supply, but they do not guarantee that every bull market will follow the same historical timetable.
After the 2016 halving, the market went through an extended accumulation phase before entering a powerful rally.
Following the 2020 halving, pandemic-era monetary easing, institutional participation, and the expansion of stablecoins helped fuel a major bull market.
Around the 2024 halving, spot Bitcoin ETFs, institutional capital, and changes in macroeconomic policy altered the markets rhythm.
With only three or four historical examples, it is dangerous to apply the same cycle template mechanically.
As of October 2026, more than two years have passed since the April 2024 halving. The time window in which previous cycles often reached their peaks has already passed. The market therefore looks more like a highly uncertain late-cycle or transitional phase than a market that has clearly entered a new, broad-based bull run.
There are three main reasons for this assessment.
First, more than two years have passed since the halving, meaning the market is no longer in the early stage of the cycle.
Second, significant cost-basis resistance remains overhead, while ETF flows have not established a sustained and consistent buying trend.
Third, monetary policy has not clearly shifted toward easing. The market must contend not only with the possibility of further rate hikes but also with the risk of inflation picking up again.
That said, it would also be premature to conclude that the 2025 high must have been the final peak of the current cycle. The influence of ETFs and institutional capital means todays market is structurally different from those of 2017 and 2021.
The right approach is to follow the trend rather than blindly trust the cycle.
If BTC breaks above major cost-basis levels and holds them over the coming months, ETF inflows remain positive, long-term holders increase accumulation, and macroeconomic financial conditions improve, the case for a new sustained uptrend should become stronger.
Conversely, if BTC falls below key cost-basis levels, ETF outflows persist, and monetary conditions continue to tighten, capital preservation and risk management should take priority.
5. The Fed‘s Outlook for the Next Year: Three Possible Paths—Don’t Just Assume Rate Cuts Are Coming
The document outlines three possible monetary policy scenarios for the next 12 months, with the following subjective probability estimates:
Scenario A: The Fed pauses, then resumes rate hikes — 50%.
If inflation remains above target and the economy proves resilient, the Fed may pause first and then raise rates once or more. Markets would have to reassess both the potential peak in interest rates and how long rates may remain elevated.
Scenario B: The Fed pauses and keeps rates high — 30%.
If inflation gradually cools but the labor market and economy show no significant deterioration, the Fed may hold rates steady without rushing to cut them, allowing the effects of previous monetary tightening to continue working through the economy.
Scenario C: The economy weakens significantly, prompting rate cuts — 20%.
If employment, consumer spending, or credit markets deteriorate sharply while inflation falls at the same time, the Fed may begin easing sooner than the market expects.
Why is “pause first, then resume rate hikes” the primary scenario？ Not because it is certain to happen, but because, as of the documents publication date, concerns about inflation picking up again and financial conditions not yet being sufficiently restrictive had become important parts of the monetary policy debate.
Two things must also be distinguished: the direction of interest rates and the reason for cutting them.
If the Fed cuts rates because inflation is cooling and the economy is growing moderately, markets may interpret this as an improvement in financial conditions, potentially benefiting risk assets. But if emergency cuts are triggered by a rapidly rising unemployment rate or expanding credit risks, the initial market reaction could be panic.
That is why the formula “rate cuts equal a bull market” does not hold.
Likewise, a Fed rate hike does not automatically mean Bitcoin will fall. If the market initially expects a 50-basis-point hike but the Fed raises rates by only 25 basis points, the move may be interpreted as less hawkish than expected, potentially pushing markets higher even though rates have increased.
Conversely, if markets expect a pause but the Fed signals that several future hikes may still be necessary, prices could fall despite rates remaining unchanged.
The key is the difference between expectations and reality—not the headline itself.
6. Three Possible Market Scenarios for the Next Year: Sideways Consolidation, a Rally, or a Decline
Combining technical indicators, ETF flows, on-chain data, and the Feds policy outlook, the document presents three subjective scenarios for the next 12 months.
Scenario 1: Sideways Consolidation and Base-Building — 45%
The Fed may keep rates elevated and could even raise them again at some point. ETF flows may fluctuate without developing into a prolonged, extreme exodus. On-chain selling pressure may gradually ease, but not enough to fuel a strong, sustained rally.
BTC could remain in a wide trading range for an extended period. Every rebound might convince investors that the bull market is back, while every decline could revive fears that the bear market is not over.
Altcoins would likely show significant divergence. A small number of projects with genuine demand might demonstrate resilience, while many tokens with limited liquidity could continue to underperform BTC.
Under this scenario, the priority is not to predict every short-term move. It is to preserve cash, control position sizes, build positions gradually, and avoid losing patience simply because the market has been moving sideways for too long.
Scenario 2: A Renewed Sustained Uptrend — 30%
Several conditions would need to materialize together:
Inflation gradually cools, and the Fed stops signaling further rate hikes.
U.S. Treasury yields and the dollar weaken, improving financial conditions.
Spot Bitcoin ETFs record net inflows for several consecutive weeks, rather than seeing one day of large inflows followed by a rapid reversal.
BTC breaks above key overhead cost-basis levels, accompanied by stronger trading volume and spot demand.
Selling pressure from long-term holders eases, and the market becomes less dependent on leverage to drive prices higher.
If these conditions align, BTC could strengthen first, with ETH and selected major altcoins gradually following.
However, even if Bitcoin rises, that does not mean every altcoin will rally. The market could experience a selective, structurally driven bull run rather than the broad-based surge seen in 2021.
Scenario 3: Further Declines and a Deeper Bear Market — 25%
Potential triggers include:
Inflation remains stubbornly high, forcing the Fed to raise rates again or keep them elevated for an extended period.
The U.S. dollar and Treasury yields strengthen further.
Spot Bitcoin ETFs experience net outflows for several consecutive weeks.
BTC breaks below important cost-basis levels and fails to reclaim them during subsequent rebounds.
Bullish leveraged positions become overcrowded, triggering successive liquidations after key support levels give way.
The biggest risk in this scenario is treating every decline as a buying opportunity.
A genuine market bottom does not form simply because prices have “fallen enough.” It forms when the relationship between selling pressure, valuation, liquidity, and buying demand changes.
7. What Should Ordinary Investors Do？ Survive First, Then Look for Opportunities
Long-Term Spot Investors: Scale In Instead of Betting Everything at Once
If you plan to hold BTC for at least two years and the money involved is not needed for living expenses, borrowed funds, or other near-term obligations, consider dividing your planned investment into four to six portions and deploying them gradually according to a schedule or predefined conditions.
First tranche: Establish a small starter position and assess whether you can tolerate actual market volatility.
Second tranche: Wait for a retest of key support levels and signs that selling pressure is easing.
Third tranche: Look for sustained improvement in ETF flows.
Fourth tranche: Add exposure after the broader trend receives stronger confirmation.
Remaining capital: Keep some available for more extreme market volatility.
Scaling in does not mean automatically buying more as prices fall. If market structure continues to deteriorate or your investment thesis becomes invalid, pause further purchases.
Dollar-Cost Averaging Investors: Follow a Fixed Schedule, Not Market Emotions
Invest a predetermined amount every week or month. Dollar-cost averaging reduces the pressure to time the market, but it does not guarantee a profit.
Given the current macroeconomic uncertainty, you could combine regular investing with a trend filter:
When BTC trades above key cost-basis levels and ETF flows improve, continue investing at the planned pace.
When BTC falls below key cost-basis levels and outflows persist, consider slowing the pace of new investments.
During periods of extreme fear, do not automatically increase your position. Reassess your risk budget first.
Write down the rules in advance to avoid changing them impulsively after the market moves.
Swing Traders: Trade Confirmed Price Action, Not Your Predictions About the Fed
For short-term BTC trading, monitor the following levels:
$82,000: A key near-term dividing line.
$83,300–$83,800: Resistance zone for a rebound.
$88,000: Cost-basis resistance zone.
$81,500: Reference level for the cost basis of U.S. spot Bitcoin ETFs.
$80,000: Area to monitor for order-book buying interest.
For ETH, watch these levels:
$2,400: Support.
$2,460–$2,510: Resistance zone during a rebound.
$2,317: A more important structural support level.
Without confirmation, do not chase a short position or blindly buy the dip.
Define your trading logic first: Are you trading a breakout or a rebound from support？ Next, determine the conditions that would invalidate your thesis. Finally, calculate how much you can afford to lose before deciding how large your position should be.
Futures Traders: Prioritize Survival Before Fed Meetings
Markets can reverse sharply around Federal Reserve and Bank of Japan meetings.
Do not go all-in on longs simply because you expect a pause, and do not go all-in on shorts because you anticipate a rate hike.
Avoid excessive leverage ahead of major macroeconomic events. Calculate the distance between your liquidation price and stop-loss level, and do not keep adding to losing positions just to prove that your original thesis was correct.
The principle is simple: Decide how much you can afford to lose before deciding how much to trade.
Altcoin Investors: Evaluate Survival Prospects Before Upside Potential
Focus on token unlocks, genuine demand, liquidity, and valuation.
Do not assume a token is cheap simply because it has fallen 80% from its peak. The magnitude of a price decline does not determine fair value.
If you cannot consistently monitor project metrics, tokenomics, and capital flows, reducing your portfolio's altcoin allocation may be more practical than constantly switching between tokens.
Conclusion: Watch Three Key Signals
First, is the Fed merely pausing, or is it signaling a more hawkish policy outlook？
Do not focus only on the phrase “rates remain unchanged.” Pay attention to the Feds assessment of inflation, employment, and the future path of interest rates.
Second, can ETF capital flows recover consistently？
A daily inflow worth hundreds of millions of dollars deserves attention, but the direction of flows over several consecutive weeks provides a more reliable signal.
Third, can BTC break above the cost-basis resistance zone and hold it on a retest？
If BTC breaks above the $88,000 area while ETF flows and spot demand improve at the same time, the market could enter a more constructive phase.
If BTC falls below the $80,000 area while ETF outflows persist and macroeconomic expectations continue to tighten, the risk of further declines deserves greater attention.
Remember one thing: A Fed rate pause does not guarantee a rally, and the Bitcoin halving is not a timetable.
What truly protects you is not predicting every market move. It is knowing which signals should prompt you to act—and when you need to admit that your original thesis was wrong.