Bitcoin has kicked off October with a significant price surge, breaking past the $117,000 mark for the first time since mid-September. The cryptocurrency’s jump of more than 4% came in response to recent labor market data from the U.S., which has reignited expectations for Federal Reserve interest rate cuts.
The rally was sparked by a report from Automatic Data Processing (ADP) indicating a surprising drop of 32,000 private payrolls in September, contrary to analysts’ predictions of a gain of 45,000. This marks the third contraction in four months, highlighting ongoing economic vulnerabilities. In light of this negative data, markets are recalibrating to price in a growing likelihood of multiple rate cuts from the Federal Reserve in 2025. Current probabilities suggest that instead of two cuts, traders are now leaning toward three, with even four potential cuts being considered.
The labor market’s fragility is becoming more evident as the number of job openings increased only slightly by 19,000 in August, bringing the total to 7.208 million, a figure close to the lowest since January 2021. The three-month average has also dipped to a low of 7.26 million, suggesting a challenging employment landscape. With the recent drop in the job vacancy-to-unemployment ratio to 0.98, there are now more unemployed individuals than available job positions—157,000 more, to be exact. Such figures signal a significant shift in monetary policy expectations, pushing the CME FedWatch Tool to indicate a 99% probability of a 25 basis points rate cut at the upcoming FOMC meeting.
A looser monetary policy environment is generally regarded as beneficial for Bitcoin, as it tends to weaken the dollar and heightens the appeal of risk assets. Historically, the final quarter of the year has been favorable for Bitcoin, often resulting in strong returns and remarkable rallies during “Uptober.”
Recent on-chain analysis from CryptoQuant supports the view that Bitcoin is well-positioned for a potential rally in Q4. Following its recovery above the Trader’s Realized Price at $116,000, Bitcoin reestablished its bull phase. The demand for Bitcoin has shown a steady climb since July, currently trending at a monthly growth rate of 62,000 BTC, reminiscent of growth patterns seen during previous Q4 surges in 2020, 2021, and 2024.
Meanwhile, large holders, or “whales,” have also been increasing their holdings significantly. Statistics highlight an annual growth rate of 331,000 BTC among substantial addresses, compared to previous years, suggesting a strong bullish sentiment. According to CryptoQuant, these dynamics could propel Bitcoin’s target range for Q4 up to between $160,000 and $200,000.
Analysts are observing Bitcoin’s structure in relation to theory and broader liquidity cycles, noting that a shift in monetary policy at the start of 2024 initiated an accumulation range. The recent low in April has laid the groundwork for the current bullish trend, with support expected around $106,400 to $125,600. This analysis posits that Bitcoin may be on the cusp of a larger bullish phase, with any pullbacks likely being healthy corrections rather than indicative of a more profound downturn.
From a technical viewpoint, Bitcoin is currently consolidating near the $117,000 mark. Key support is identified at approximately $108,131, and should the price fall below this, it may signal a bearish outlook. However, maintaining above the $113,000 to $118,000 range favors more bullish prospects. Immediate resistance is situated at $120,000, and a breakthrough could pave the way for new all-time highs beyond $130,000, with further extension targets approaching $145,000 to $150,000.
