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Overall Market
Data source: TradingView
As we highlighted in our previous reports, we anticipated the Federal Reserve would initiate the next rate-cut cycle in September, setting a bullish foundation for risk assets, particularly Bitcoin ($BTC). On September 17, the Fed delivered a 25 basis point rate cut at its FOMC meeting and signaled two additional cuts by the end of 2025. Similarly, the Bank of Canada resumed its easing cycle after a six-month pause, lowering its key policy rate to 2.50%. Our desk observes a clear global trend toward monetary easing among major central banks, with the notable exception of the Bank of Japan (BOJ).
The BOJ is scheduled to announce its interest rate decision this Friday, with the market widely expecting it to maintain its current rate at 0.50%. While the BOJ has held off on rate hikes so far, we believe that once it resumes tightening, it could introduce uncertainty into the global economy and increase volatility across crypto assets.
The Fed’s 25 basis point cut was fully priced in a week ago, and BTC has since rebounded from support at $108,000 to around $117,000. The price is currently forming a bullish flag pattern, as highlighted in the chart. We anticipate a short consolidation phase at this level, building momentum for a potential breakout above the upper trendline and the next leg up in BTC’s rally.
A notable theme gaining traction recently is the Digital Asset Treasury (DAT) approach, where many publicly listed companies are acquiring and holding crypto assets on their balance sheets. This institutional adoption has driven significant price appreciation in large-cap tokens such as Ethereum ($ETH), Solana ($SOL), and Binance Coin ($BNB). Consequently, BTC’s market dominance has declined below 60%, currently sitting at 57.7%, signaling the onset of the long-awaited altcoin season. However, our desk notes that this shift is primarily driven by institutional accumulation of large-cap tokens rather than the innovation-driven hype seen during the 2021 DeFi summer. The relative lack of enthusiasm for new innovations marks a key difference from previous bull markets.
We believe this current bull cycle is fundamentally different from prior ones, as it is driven by institutionalization and growing mainstream exposure to crypto assets. This trend is fueled not only by the strong performance of crypto but also by institutional investors’ search for alternatives beyond traditional asset classes.
Concerns over the Federal Reserve’s independence have prompted investors and central banks to diversify away from US Treasuries. This is evidenced by the surge in precious metals prices: gold recently hit a new all-time high of $3,700, up from $3,310 just a month ago. Meanwhile, the 10-year US Treasury yield remains above 4%, and the 30-year yield peaked near 5% at the end of August before retreating amid expectations of Fed rate cuts. The rapid rise in gold prices signals a rotation from US Treasuries into safe-haven assets. Bitcoin, often dubbed “digital gold,” is also gaining investor confidence due to its unique investable characteristics.
Our desk expects that as institutional investors continue to accumulate BTC with a long-term horizon, price volatility will diminish, and the bull market cycle will extend, increasingly mirroring the behavior of the US stock market.
Bitcoin ETF Tracker
The above table shows the daily BTC spot ETF net inflow data for the past five trading sessions.
As shown in the table, BTC spot ETF capital inflows exceeded $500 million on both September 11 and 12, reflecting strong market confidence following the US CPI release on September 11. The CPI data reinforced expectations for the Federal Reserve to begin its rate-cut cycle, which was fully priced in ahead of the September 17 FOMC meeting.
On September 16, inflows remained robust at $292.27 million, continuing the bullish momentum. However, on September 17, following Fed Chair Powell’s rate cut announcement and renewed concerns over the US labor market, we observed a net outflow of $51.28 million. This suggests that some investors took profits from the recent BTC rally and rotated capital back into traditional assets, supported by new all-time highs in US equity indexes and declining US Treasury yields.
From a capital flow perspective, our desk notes that investors are strategically leveraging BTC to maximize short-term gains while reallocating funds to the US stock market, particularly given the strong performance of US technology stocks.
Macro at a glance
Last Thursday, September 11:
The European Central Bank held interest rates steady as expected, maintaining an optimistic outlook on growth and inflation, which tempered expectations for further borrowing cost cuts.
US Consumer Price Index (CPI) data aligned with forecasts, showing 2.9% annual growth in August, with core CPI rising 3.1%.
However, US initial jobless claims surged to 263,000 last week, exceeding the forecasted 235,000 and signaling a weakening labor market.
Last Friday, September 12:
Germany’s CPI recorded 2.2% annual growth in August, with monthly growth slowing to 0.1% from July’s 0.3%.
On Tuesday, September 16:
US retail sales demonstrated robust momentum, rising 0.6% month-over-month in August, well above the 0.2% forecast. Core retail sales also accelerated from 0.4% in July to 0.7% in August, surpassing expectations.
Canada’s CPI declined by 0.1% in August, following July’s 0.3% increase, positioning the Bank of Canada favorably to consider further rate cuts to stimulate the economy.
On Wednesday, September 17:
The UK’s CPI grew 0.3% month-over-month in August, maintaining an annual rate of 3.8%, unchanged from July.
Eurozone CPI rose 2.0% year-over-year in August, slightly below the forecasted 2.1%.
The Bank of Canada cut its key interest rate by 25 basis points to a three-year low of 2.50%, marking its first reduction in six months. The move reflects a softening labor market and reduced inflationary pressures, with the bank signaling readiness for additional cuts if economic risks intensify.
Similarly, the Federal Reserve delivered a 25 basis point rate cut at its September FOMC meeting, passing with an 11-to-1 vote. The Fed indicated two more cuts are likely before the end of 2025 amid growing concerns over the US labor market, despite persistent inflationary pressures.
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