Crypto Markets Start Strong Quarter
Bitcoin climbed nearly 4% over the past 24 hours to reach $117,400, marking a positive start to what has historically been crypto’s strongest quarter. The gains extended early in the U.S. session as fresh economic data suggested the Federal Reserve’s rate-cutting cycle might continue beyond September.
Private payrolls saw their largest decline in 2.5 years during September, with companies in the private sector losing 32,000 jobs according to ADP’s report. August’s originally reported 54,000 job gain was revised to a loss of 3,000 positions. Normally, traders would focus more on the Labor Department’s monthly jobs report due Friday, but that release will likely be delayed because of the ongoing government shutdown.
Mixed Economic Signals
The ISM September Manufacturing PMI Survey came in at 49.1, matching expectations. However, the Prices Paid index provided some encouraging inflation news, dropping to 61.9 from 63.7 in August and beating forecasts of 63.2. This suggests some easing of price pressures.
While crypto markets advanced, traditional equities showed weakness. Both the Nasdaq and S&P 500 were down slightly. Gold, which hit a fresh all-time high of $3,921 earlier on Wednesday, pulled back to $3,888.
Altcoins Outperform Bitcoin
Looking across the crypto space, gains were widespread. Ether, Solana’s SOL, and DOGE all rose 5%-7% over the past 24 hours, outpacing bitcoin’s advance. This broader strength across digital assets indicates growing investor confidence in the sector.
Market participants almost universally expect the Federal Reserve to lower benchmark interest rates further at the upcoming October meeting. The CME FedWatch Tool shows a 99% probability of a 25 basis point cut, up from 92% one week ago. This expectation appears to be driving much of the current market optimism.
September Performance and Outlook
September has typically been a difficult month for cryptocurrencies, but bitcoin actually had one of its best Septembers in many years, gaining about 6% for the month. In the final two days of September, spot bitcoin ETFs gathered $950 million of inflows, more than reversing the $900 million of outflows from the previous week.
Noelle Acheson, author of the Crypto Is Macro Now newsletter, believes “the next quarter is likely to see the start of the crypto bull market.” Her outlook is driven by incoming macro tailwinds including interest rate easing and potential policy support measures.
She also expects this environment to benefit altcoins, particularly with new spot ETFs likely coming to market. “The coming quarter should bring the kickoff of ‘alt-season’, as attention starts to turn away from the ‘majors’ (BTC and ETH) and towards smaller, more volatile tokens,” Acheson noted.
This shift in focus could mark an important transition in the crypto market cycle, though it’s worth remembering that predictions in this space often prove more complicated than they initially appear.
