Bitcoin (BTC) has formed a bullish flag pattern on its daily chart, a technical setup that suggests the recent rally could continue toward $100,000 if price breaks above $80,000. The development raises the question of whether institutional accumulation is sufficient to sustain this upward momentum despite hawkish signals from the Federal Reserve.
The cryptocurrency has reduced its yearly losses to 11%, a performance attributed in part to renewed trader interest following the U.S. Securities and Exchange Commission's approval of the industry. While initial market euphoria has moderated, the sector's reaction to regulatory clarity may have ended the bearish cycle for the leading digital asset. Additionally, the U.S. Treasury Department's decision to buy back twice the usual amount of bonds signals that the Trump administration is committed to supporting higher asset valuations, potentially independent of Federal Reserve policy.
However, macroeconomic headwinds persist. Data from CME Group's FedWatch tool indicates that the probability of a 25 basis point rate hike at the next Federal Open Market Committee meeting has risen sharply to 65%, up from 40% a week earlier. Inflation remains nearly double the Fed's target, providing central bankers with a strong incentive to raise rates further. Despite these shifting odds, the market did not experience a significant drop after the probabilities changed, suggesting that recent short liquidations may have deterred new bearish positions.
Institutional demand remains a key support factor. Exchange-traded funds linked to Bitcoin recorded net inflows of $3.5 billion in August, marking the highest monthly total since September 2025. At that time, Bitcoin was trading near $110,000. This flow of capital indicates that Wall Street has adopted a risk-on attitude toward cryptocurrencies, even as the Fed maintains a hawkish stance. Sentiment gauges reflect this shift; the Crypto Fear and Greed Index currently stands at 73, classified as "Greed," a significant increase from its reading of 36 one month ago.
Technically, the bullish flag pattern indicates a temporary pause where early buyers take profits and new buyers position for the next move. A break above $80,000 would confirm the start of the next upward leg. Conversely, momentum is currently fading as the Relative Strength Index has dipped below its signal line, confirming a phase of consolidation. The critical support level for Bitcoin is now its 200-day exponential moving average. As long as the price remains above this mark, the broader rally structure remains intact.