Bitcoin prices have risen Last week, it rose 12.14%, eliminating the inactive losses in September. Altcoins mainly drove large gatherings from July to September.This time, Bull Run was led by Bitcoin.
During the same period, major Altcoins like Ethereum (ETH) and Solana (Sol) saw more modest benefits of 12.90% and 13.24%, respectively.
Bull Reasons: Shutdowns, Jobs, and FRBs
A key factor in last week’s rally was the US government closure that began on Wednesday’s midnight EST. During the closure, US government officials have stopped working, and the government is unable to use that budget. This includes federal employee salaries and other government spending.
Market participants saw this situation as a significant source of economic uncertainty and believed the Federal Reserve would cut interest rates at the FOMC meeting held in late October.
According to CME Group’s FedWatch tool, the probability of a US interest rate cut in October was about 89% on September 30th. However, after the government was confirmed to close later that afternoon, the odds skyrocketed to 98%. At that moment, Bitcoin, which was trading at the $112,000 level, began a rapid rise.
Weak job data also promoted Bitcoin’s Bull Run. On Wednesday, the US ADP Employment Report for September reached -32,000, while market forecasts fell short of +50,000. The data supports the view that the US labor market is being deprived of the economy.
According to FedWatch, the market is currently priced four additional fee reductions by next June. Since the closure began, US Republicans have said they will fire additional federal employees during this period.
The move is seen as an attempt to complete a cut to federal employees that President Donald Trump failed to achieve during his administration. If this attempt is successful, the US unemployment rate, now at 4.3%, could rise significantly. With non-farm payroll already weakening, an increase in unemployment will prompt the Fed to pursue additional interest rate cuts.
Japanese politics also plays a role
On Friday, the specimen will be elected president of Japan’s Liberal Democratic Party, and will likely become prime minister. She is expected to launch a policy that weakens the yen.
Her predecessor, Fumio kishida, had been considering raising interest rates to combat inflation, but Kochi’s policy is expected to lead to easing monetary policy. Against this backdrop, Bitcoin prices surged shortly beyond $125,500 over the weekend, setting their highest ever high.
In summary, Bitcoin’s pricelessness comes from market participants acting immediately on future expectations. They expect global liquidity to become even easier in the near future. However, it is difficult to predict how market sentiment will change as the US government continues to close.
The US Treasury bond auction on Monday and Tuesday will be the most interesting event of the week. Over two days,Asury issues $249 billion in short-term bonds. According to past precedents, these auctions could progress despite the closure.
This significantly limits the surplus liquidity of the market without government spending. Bitcoin prices rose more than 10% in just three days. It remains to be seen whether the meeting will continue within a short-term liquidity silence.
Powell’s eyes on Thursday’s speech
Many macro indicators are on the agenda this week. On Monday, the conference committee’s employment trend index will be released.
Tuesday brings a survey of New York Fed consumer expectations. Minutes from the September FOMC meeting and the US 10th-year Treasury auction are scheduled for Wednesday.
And on Thursday, Federal Reserve Chairman Jerome Powell will speak alongside the US 30-year Treasury auction. Several other Fed officials will also give public speeches. However, these events are unlikely to shake up strong market expectations for interest rate cuts in October.
Instead, improvised government closure-related measures from the US Congress could have an impact on the market. The Trump administration’s approach to firing federal employees could be a source of volatility. We look forward to the investors having a profitable week.
Is the post a bullback? Bitcoin surged in the waves of macro signals first appeared in beincrypto.
