Bitcoin Starts the Week on Firm Footing as Investors Eye Fed Policy Shift
Bitcoin is beginning the week with upward momentum, though it has yet to decisively break through a key resistance level. Nevertheless, investors have cause for optimism.
The leading cryptocurrency was trading around $86,100 on Monday morning, marking a 1.14% increase over the preceding 24 hours and boasting a market capitalization of $1.73 trillion. The broader cryptocurrency market is valued at $2.94 trillion, up 1.36% on the day. The Fear & Greed Index currently stands at 68, remaining in “greed” territory and indicating a stabilization of sentiment following a dip from “extreme greed” readings last month.
The catalyst for this shift appears to be Friday’s disappointing jobs report, which, while unfavorable for the economy, proved beneficial for risk assets. According to the Bureau of Labor Statistics, U.S. employers added only 29,000 positions in September, a figure roughly one-third of economists’ expectations. The unemployment rate consequently rose to 4.2%.
Revisions to previous data further exacerbated the negative economic picture. July’s job gains were revised downward from 21,000 to a loss of 10,000 jobs, and August’s figures were cut from 162,000 to 133,000. Annual wage growth also cooled, settling at 3.0%.
This scenario—bad news for workers translating into good news for risk assets—reflects a peculiar dynamic in the current economic cycle.
The Federal Reserve had previously raised interest rates by a quarter point to 3.75%-4.00% on September 16, a decision met with unanimous approval. Just a week prior to Friday’s report, bond traders had assigned a 64% probability to an October rate hike. Following the jobs data, those odds plummeted to approximately 16%-22%, depending on the specific market snapshot.
This situation is a stark contrast to the previous month. On September 4, a robust August jobs report had sent Bitcoin tumbling by more than 2% to near $79,300 as rate hike expectations surged. Bitcoin is now trading approximately 8% above that level.
Equities also reacted positively. The S&P 500 closed Friday at 7,722.72, up 0.73%, while the Nasdaq gained 1.19% to 27,190.86, and the Dow added 0.49% to 51,176.96. Nvidia reached a new record high, and stock futures saw a slight increase on Sunday night.
Altcoins presented a mixed performance. Ethereum was trading at $2,711, up 0.59%, and XRP at $1.51, up 0.81%. Solana, however, slipped 0.91% to $120.31. While all of the top 10 altcoins were in positive territory, none had moved more than 1%, with the exception of Hyperliquid, which surged 3.68% on the day to $93.17 and was up 6% for the week.
Demand for Bitcoin ETFs also remains strong. U.S. spot Bitcoin ETFs recorded net inflows of $189.84 million in the latest daily reading, bringing their total net assets to $101.1 billion, according to data from Decrypt.
Technical indicators suggest a degree of hesitation. On the daily chart, the high of $87,354 remains a critical level to overcome.
Momentum, however, appears robust. The Relative Strength Index (RSI), which measures the magnitude of recent price changes to evaluate overbought or oversold conditions, stands at 64.7. While this indicates strong upward movement, it is not yet in the “extremely overbought” territory (above 70). The Average Directional Index (ADX), which gauges trend strength irrespective of direction, is at 43.4, suggesting a strong trend is in place (readings above 25).
Exponential Moving Averages (EMAs), which give more weight to recent prices, also offer bullish signals. The chart shows the 50-day EMA above the 200-day EMA, a classic “golden cross” formation that occurred in mid-September. This period coincided with Bitcoin’s second-best monthly performance on record.
An even more significant bullish indicator has recently emerged: the 100-day EMA has now crossed above the 200-day EMA. This development, illustrated by the dotted white line on the accompanying chart, is considered a stronger signal because it is more difficult to achieve. While a sharp short-term rally can push the 50-day EMA above the 200-day EMA, for the slower 100-day EMA to cross the 200-day EMA, Bitcoin’s price must remain elevated for an extended period, indicating a sustained rebuilding of its medium-term trend rather than just a bounce from lower levels.
The confluence of these two golden crosses suggests that both short-term and medium-term price averages are now above the long-term average, providing a strong confirmation of the prevailing upward trend. It is important to note, however, that EMAs are lagging indicators, confirming past price action rather than predicting future movements.
On Myriad, a prediction market operated by Decrypt’s parent company Dastan, traders are expressing bullish sentiment for a short-term price increase. In the October highs market, the probability of Bitcoin touching $87,500 is priced at 80%, $90,000 at 59%, $95,000 at 25%, and $100,000 at 12%.
Looking ahead, the upcoming week’s economic calendar, though brief, is significant. The Federal Reserve is scheduled to release the minutes from its September meeting on Wednesday, October 7, at 2:00 p.m. ET. The Bureau of Labor Statistics will publish September’s Consumer Price Index (CPI) data on October 14. The Fed’s next policy meeting is slated for October 27-28, with a press conference scheduled for October 28 at 2:30 p.m. ET.
