Bitcoin managed to climb above $118,000, driven by expectations of interest rate cuts in the United States, further fueled by uncertainty over the future health of the U.S. economy linked to the government shutdown. The much-anticipated U.S. NFP labor market report scheduled for Friday will not be released, while private data — the August JOLTS report (slightly above forecasts) and the September ADP report (much weaker; showing a decline in employment) — provide the Federal Reserve with an argument for cutting interest rates.
Markets expect the Fed to lower rates two more times this year, even though non-labor market data remain relatively solid and do not indicate problems with U.S. consumption. The dollar is therefore weakening under fairly “healthy” (non-recessionary) conditions, which supports gains on Wall Street and in cryptocurrencies, both benefiting from falling bond yields and increased appetite for risk assets. Net inflows into ETH and BTC ETFs have risen again; for Bitcoin alone, inflows on the last day of September reached $429 million, extending the positive momentum.
From a technical perspective, Bitcoin is currently trading around 5% above the short-term holder realized price (STH Realized Price) and has found strong support at the critical $110,000 level — significant from both a technical and on-chain perspective. The base case now appears to be an attempt to “attack” the all-time high near $123,000, especially if sentiment on Wall Street remains positive. A double-bottom pattern has also formed around $108,000–$110,000, reinforcing bullish momentum and narrative. However, a return toward $100,000 from this level would increase the likelihood of testing the $98,000–$100,000 zone.
Source: xStation5
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