Bitcoin ETF Momentum and Federal Reserve Hopes Drive Projections for $116K Rally

During late August and early September 2025, Bitcoin’s movements have become a focal point for both traders and market observers, as the cryptocurrency challenged significant resistance in the $110,000 to $112,000 range. As of September 4, 2025,

ended the day at $110,723.60, boasting a market capitalization of $2.21 trillion and seeing $60.13 billion in trades over the past 24 hours. Following an early August downturn that briefly sent the price below $108,000, Bitcoin has staged a modest rebound, underpinned by renewed interest from institutional players.

A primary catalyst behind Bitcoin’s latest momentum has been the persistent flow of investment into spot Bitcoin ETFs. Although there was a single day of net outflows on September 4, the overall pattern remains strong, with U.S.-listed ETFs drawing in close to $10 billion in new funds since May 1, according to Farside Investors. Experts believe these inflows are driven more by long-term macro strategies from large investors than by short-term market swings.

Another major influence is the prospect of a change in U.S. Federal Reserve policy. Markus Thielen, a crypto analyst at 10x Research, has pointed out that political debates, particularly Donald Trump’s critiques of Fed Chair Jerome Powell, could signal a shift toward a more accommodative approach if a new administration comes in. Historical contexts, such as the inflationary era under Arthur Burns in the 1970s, demonstrate that looser monetary policy and reduced rates have historically benefited Bitcoin’s price growth.

At the same time, on-chain metrics are flashing bullish signals: Bitcoin balances on centralized exchanges have continued to dwindle, with net outflows recorded for 98 straight days by late August—marking the longest stretch since 2020. According to Thielen, this ongoing decline indicates tightening supply and heightened demand, conditions that have often preceded notable price rallies in the past.

The interplay of these macro trends and blockchain data has prompted some market experts to forecast that Bitcoin could reach $116,000 by the close of September 2025. Reaching this target from current prices would mean a gain of 6.45% and set a new record above the previous peak of $111,970. Although this outlook depends on how market conditions unfold, the combination of strong ETF inflows, possible Fed policy changes, and shrinking exchange reserves makes for a promising setup for further price increases.

Looking at the bigger picture, Bitcoin’s price behavior is increasingly linked to global liquidity cycles, as reflected in the historically strong relationship between Bitcoin and the expansion of the global M2 money supply. Central bank data from the U.S., China, Europe, and other major economies show that periods of rising liquidity have often coincided with Bitcoin bull runs. With worldwide liquidity still on the rise and Bitcoin’s response historically lagging by 60 to 70 days, some analysts believe another upward phase may be imminent.

To sum up, Bitcoin’s current price movements and prevailing macroeconomic conditions point toward a potential breakout above $116,000 in the near term. Even though volatility remains high and market sentiment can shift quickly, the combination of robust ETF investments, speculation around policy changes, and declining exchange-held Bitcoin presents a cautiously optimistic outlook. Investors should keep a close watch on important resistance zones and broader economic trends as the market landscape continues to shift.