A crypto analyst who accurately predicted a recent Bitcoin flash crash to $94,000 has now set an ambitious new target of $130,000. This prediction comes as the market grapples with significant corrections and a growing debate among investors about whether Bitcoin’s historical volatility, traditionally tied to halving cycles, is being mitigated by massive institutional adoption and evolving macroeconomic factors.
The world of cryptocurrency is abuzz with new price predictions and fervent debates about Bitcoin’s (BTC) future trajectory. Following a significant market correction and a flash crash that saw Bitcoin momentarily dip to $94,000, a prominent crypto analyst known as ‘setup sfx’ has set a new, optimistic target for the pioneer cryptocurrency: $130,000. This bold forecast is predicated on a short-term pullback to the $96,000 support level, expected to precede a fresh rally towards a new all-time high.
The analyst’s earlier prediction of Bitcoin’s flash crash to $94,000 from $97,000, which triggered over $1.5 billion in liquidations, lends significant weight to their current outlook. As of late 2025, Bitcoin has been trading around the $97,223 mark, showing signs of momentum despite a recent 2% dip. This aligns with broader market sentiment, which has turned bullish, evidenced by a 99% surge in Bitcoin’s trading volume over 24 hours and its market cap nearing the $2 trillion milestone, according to CoinMarketCap data.
The Fading Shadow of Cyclical Crashes?
For years, Bitcoin’s price action has been characterized by hyperbolic boom-bust cycles, often linked to its quadrennial halving events. These cycles typically involve two to three years of booming prices, followed by roughly a year-long bust. However, a compelling argument is gaining traction among some investors, suggesting that Bitcoin’s susceptibility to severe, halving-induced declines may be waning.
Arthur Hayes, the former CEO of BitMEX, posited in an October 8, 2025, blog post that the traditional four-year price cycle is becoming less relevant. He argues that factors such as increasing global liquidity, driven by central bank policies, and the rapidly growing institutionalization of Bitcoin are fundamentally altering its supply and demand dynamics. This perspective suggests that central bankers’ increasing tolerance for inflation above the typical 2% target could lead to a consistently faster expansion of the money supply, pushing investors towards Bitcoin as a hedge against inflation, a role traditional fiat currencies cannot fulfill.
Institutional Embrace and Market Stability
The landscape of Bitcoin investment has been significantly transformed by the SEC approval of the first Bitcoin ETF. This milestone, celebrated in early 2024, opened the floodgates for a new class of investors, including pension funds, financial advisors, and institutional players, making Bitcoin exposure a mainstream and rules-based allocation. This influx of durable demand from brokerage accounts and institutional capital is seen as a more stable foundation for the market, contrasting sharply with the speculative and often fraudulent practices that characterized earlier crypto rallies and collapses, such as those of FTX, Celsius, and 3AC.
Alex Gladstein, Director of Strategy at the Human Rights Foundation, also highlighted the massive and consistent inflows of billions of dollars into these newly launched Bitcoin ETFs as a primary driver of recent price action, predicting further spikes post-halving. This institutionalization contributes to a more mature market where prices are less susceptible to the extreme vacuums that led to 80% drawdowns in previous bear markets.
The October 10th Flash Crash: A Test of Resilience
A recent real-world test of Bitcoin’s evolving stability occurred during the October 10, 2025, flash crash. While many altcoins experienced brutal declines of 70% or more, Bitcoin demonstrated comparative resilience, losing “just 7%”. This pattern suggests that a base of large, steady buyers is anchoring the market, even when broader market sentiment sours, indicating a potential shift away from its historical patterns of extreme volatility that were previously tied to its scarcity. However, it’s crucial to acknowledge that external “black swan” events not directly related to supply or scarcity could still trigger significant price drops.
Macroeconomic Headwinds and Shared Market Drivers
Despite the growing optimism, Bitcoin remains inextricably linked to broader macroeconomic forces and traditional financial markets, especially during periods of stress. Empirical data from 2025 shows a moderate to high positive correlation (often 0.4 to 0.6) between Bitcoin and major equity indices like the S&P 500 and Nasdaq, a correlation that tends to spike during market downturns. This interconnectedness is driven by several shared factors:
- Monetary Policy: Hawkish Federal Reserve policies and rising interest rates make safer assets more appealing, drawing capital away from speculative assets like stocks and cryptocurrencies.
- Economic Growth: Weak economic data or geopolitical tensions prompt widespread risk aversion, leading to simultaneous sell-offs.
- U.S. Dollar Strength: A strengthening dollar, often a safe haven during crises, pressures dollar-denominated global assets.
- Regulatory Developments: Uncertainty around crypto regulations can inject volatility across interconnected fintech and crypto sectors.
Behavioral factors also amplify synchronized declines, including widespread risk-off sentiment, herd behavior, and forced margin calls leading to cascading liquidations across markets, as seen during the September 2025 market crash which wiped out over $162 billion in crypto market cap and saw Bitcoin and Ethereum fall by 1.3-2.4% alongside equity declines, according to The Motley Fool.
Navigating the Evolving Bitcoin Market
The journey from Bitcoin’s early days, when it traded around $26,459 during the “crypto crash” of May 2022, to its current position above $97,000, has been marked by significant volatility and growth. Analysts like Jelle have noted similarities between current Bitcoin price action and its bullish behavior during the 2020 all-time high breakout, suggesting another potential breakout could be imminent if momentum holds.
While some investors like Arthur Hayes believe the brutal 80% drawdowns of previous cycles may become less frequent, the prudent approach remains unchanged for long-term holders. Investors should size their positions to withstand potential 50% declines without being forced to sell. Strategies like dollar-cost averaging (DCA) can effectively leverage Bitcoin’s inherent scarcity over time, regardless of short-term fluctuations.
The market is poised for a significant move towards the predicted $130,000 target, following a healthy retracement to the $96,000 zone. The convergence of increasing institutional demand, ETF-driven capital inflows, and a macroeconomic environment that could favor inflation hedges, all point towards a potentially less volatile, yet still dynamic, future for Bitcoin. The ongoing market sentiment, despite recent corrections, leans bullish, indicating a community ready to embrace new all-time highs.
