Bitcoin climbed to $111,000 as traders watched for potential short squeezes near $116,000–$117,000 and awaited Friday's CPI data, released despite the U.S. government shutdown. Market sentiment remains split on whether the move reflects a sustained recovery or a temporary bounce before key resistance levels.

BTC price analysis indicates a possible $114,000 support level following a 4.2% correction from record highs, while market liquidity begins to recover with traders positioning for increased volatility.

The Crypto Fear & Greed Index has dropped to 28/100, reaching levels not seen since April when Bitcoin traded at $83,000. The sentiment gauge collapsed 16 points overnight as BTC approached monthly lows under $109,000, creating a notable divergence between price levels and market psychology.

Bitcoin and other cryptocurrencies haven't followed gold and equities to new all-time highs this month. Research identifies four crucial factors causing this divergence: Federal Reserve rate cuts, declining exchange stablecoin reserves, trader leveraging patterns, and historical crypto market cycles that typically show delayed reactions to traditional asset movements.