Bitcoin’s $124K Dream Stalled: U.S. Policy Fog Throws Crypto’s Next Rally Into Question

Bitcoin hits a regulatory wall just as the $124K horizon comes into view. U.S. policy ambiguity isn't just noise—it's the single biggest roadblock to crypto's next bull run.

Policy paralysis in D.C. leaves markets guessing

While traders eye six-figure Bitcoin, Washington's indecision keeps the market locked in limbo. No clear regulations, no massive institutional green lights—just the usual circus of congressional hearings and empty promises. Wall Street's still waiting for a sign, and until then, don’t expect those trillion-dollar asset managers to dive in headfirst.

When bureaucracy meets blockchain, progress slows to a crawl

Market momentum doesn’t pause for politics. But try telling that to the SEC and CFTC, still caught in a turf war over what even counts as a cryptocurrency. Meanwhile, Bitcoin hovers—strong but stuck—waiting for the regulatory all-clear that may never come. Classic finance, always a day late and a dollar short.

What’s next? Price patience amid the political theater

Until U.S. leaders get their act together, volatility’s the name of the game. Think short-term swings, breakouts followed by pullbacks, and a whole lot of headline-driven action. Smart money’s hedging, retail’s HODLing, and everybody’s wondering if the U.S. will ever stop being its own worst enemy in the crypto revolution.

Key Takeaways

Why is Bitcoin under pressure?

The U.S. EPU Index surged to 939.7, nine times above average, raising risks of 2–5% contraction across investments, jobs, and consumption.

How does this cycle differ for BTC?

Active Addresses kept falling despite record highs and ETF inflows, signaling investors now rely more on exchanges and institutional vehicles than on-chain activity.

Bitcoin [BTC] has been struggling to reach a new high after trading up to $124,000, as capital inflows remain low.

U.S. economic data suggested inflows could shrink further, raising the risk of weaker prices and volumes. Even so, sentiment across broader markets pointed to a different path for the asset.

Policy stress weighs on Bitcoin

The U.S. Economic Policy Uncertainty (EPU) Index, according to Alphractal, hit 939.7 on the 15th of September—its highest since 2020 during the COVID-19 pandemic.

The EPU tracks how the market is performing and predicts key events such as recessions. Alphractal noted that a projected risk of 2–5% still looms.

Drivers included tariff shocks, persistent inflation above 3%, and heated fiscal disputes in Washington. These pressures left risk assets like Bitcoin vulnerable to at least short-term declines.

Source: Alphractal

Crypto analyst Joao Wedson warned that “history always repeats itself,” referencing Bitcoin’s performance in January 2024 when the EPU surged to 1,024 and bitcoin dropped 21% from $48,969 to $38,555.

“This is nothing more than a social fractal that has repeated itself over the centuries.”

Wedson added that this period may present a strong accumulation opportunity, stressing that such conditions are usually short-term.

Will Bitcoin break the cycle curse?

New market insights suggested that the current Bitcoin market cycle may differ from past cycles.

Crypto analyst Darkforst noted that in previous bull runs, Bitcoin’s on-chain activity surged, with Active Addresses (AA) rising alongside price.

This time appears different. While Bitcoin has set new highs, AA has continued to decline.

Darkforst explained,

“The reasons people buy Bitcoin are shifting, and the type of investor itself is changing.”

Source: X

He attributed this evolution to centralized exchanges (CEXs), which now provide extensive services that keep investors engaged on their platforms rather than on-chain.

“Some long-term holders with dormant addresses no longer count toward active address metrics.”

The entry of institutional investors has also reshaped the market.

The launch of Bitcoin spot ETFs in 2024 gave speculators access to BTC without needing to manage wallets, transact on-chain, or worry about asset security.

AMBCrypto reviewed exchange activity and found that accumulation has been underway for six consecutive weeks, according to CoinGlass.

This week alone, investors scooped up $165 million worth of Bitcoin from the market.