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Overall Market
Data source: TradingView
As highlighted in our previous report, Bitcoin is currently forming a bull flag pattern, with the upper trendline serving as a key resistance level. BTC failed to break above the $117,000 mark and was subsequently rejected, now trading below the critical $113,000 support. Having retested this resistance trendline, which has been in place since December 2024, our desk anticipates a corrective move toward the $108,000 support level, as indicated by the blue line on the chart.
Following the Federal Reserve’s 25 basis point rate cut last Wednesday, the market’s upward momentum has largely dissipated. The rate cut was widely anticipated and fully priced in ahead of the FOMC meeting, prompting our desk to caution about a potential shift in market dynamics post-announcement. While the crypto market experienced a retracement, US equities rallied, reflecting a capital rotation from crypto assets back into traditional financial markets. This behavior suggests limited market optimism for rapid liquidity easing beyond September. Additionally, the Bank of Japan’s decision to maintain its interest rate, coupled with a hawkish stance on future hikes and a gradual plan to offload ETFs, signals a clear message: the BOJ will not aggressively inject liquidity into global markets.
On Tuesday, Fed Chair Powell emphasized that US stock valuations remain elevated, raising concerns that the Fed may sustain a restrictive monetary policy for an extended period to prevent overheating and stagflation. His remarks underscore that upcoming rate cuts are likely driven more by labor market weakness than by confidence in inflation control. Should the labor market demonstrate resilience under a less restrictive environment, it is expected that the Fed will pause further cuts and refocus on inflation containment.
Our desk also observed a notable surge in gold prices alongside a sharp rise in the US 30-year Treasury yield last week, indicating that capital markets are seeking alternative asset classes. Given crypto’s sensitivity to liquidity conditions, it remains vulnerable to global macroeconomic developments and central bank policies. Should central banks slow the pace of rate cuts, we anticipate the current upward momentum in crypto assets will quickly diminish.
Historically, October has been a strong month for Bitcoin, and we expect BTC to break out of the current bull flag pattern and initiate the next leg higher, supported by the anticipated rate cut at the October FOMC meeting. However, we also foresee elevated volatility during this period. We recommend that traders manage their positions prudently and leverage our OTC and Execution services to minimize risk exposure and safeguard profits.
Bitcoin ETF Tracker
The above table shows the daily BTC spot ETF net inflow data for the past five trading sessions.
As illustrated in the table, BTC spot ETFs experienced a net capital inflow of $159.87 million over the past five trading days, despite negative outflows on Monday and Tuesday. Our desk has observed some capital rotation from crypto investments into the US stock market, particularly within the semiconductor sector. The Federal Reserve’s rate cut last week was fully anticipated and priced in ahead of the announcement, which largely explains the market retracement observed after Wednesday. We view this pullback as temporary, with the broader global market poised to benefit from a less restrictive liquidity environment.
Our seasonality analysis further supports a positive outlook for BTC in October, especially during a Fed rate cut cycle. The strong inflows observed on Wednesday indicate that institutional investors remain confident in BTC’s long-term prospects.
Macro at a glance
On Thursday, September 18,
Australia surprised markets with an unexpected 5.4k decline in employment for August, sharply contrasting the forecasted 21.2k increase. Despite this, the unemployment rate held steady at 4.2%, signaling underlying labor market resilience.
The Bank of England kept its interest rate steady at 4.00%, in line with market expectations following its 25 basis point cut in August. The BoE remains vigilant against inflationary pressures, steadfastly targeting a sustainable 2% inflation rate.
On Friday, September 19,
Japan’s national core CPI eased from 3.1% in July to 2.7% in August, reflecting moderated inflationary trends. The Bank of Japan maintained its 0.50% interest rate but adopted a hawkish stance by initiating sales of ETFs and REITs, triggering a yen rally and a pullback in the stock market.
On Tuesday, September 23,
Fed Chair Powell highlighted that asset prices remain elevated, prompting a market correction that saw stocks decline and Bitcoin dip below $112,000.
On Wednesday, September 24,
US new home sales surged to 800,000 units in August, surpassing the forecasted 650,000 and reflecting continued economic resilience. This robust housing data was supported by the Federal Reserve’s recent 25 basis point rate cut, which has evidently bolstered buyer confidence.
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