October has begun with conviction, leaving September’s turbulence behind and opening the door to renewed upside. Crypto has broken free from its range: BTC surged over 10% on the week to reclaim USD 120,000, while ETH rallied more than 15% toward USD 4,500. Both remain shy of their all-time highs, but momentum suggests it’s a matter of when, not if, those levels are retested. The macro backdrop continues to lean supportive – yields are easing, the dollar is softer, and liquidity is flowing back. The stage is set for momentum to build – higher remains the path of least resistance.
Macro: Shutdown and Softening Signals
A failure in Congress to reach a spending deal forced a government shutdown midweek, leaving markets facing a data blackout at a pivotal time. Today’s NFP report will almost certainly not be published if the standoff drags on – leaving markets flying blind into the next Fed meeting. Instead, markets have been forced to rely on softer signals: the ADP private payrolls report printed –32,000, while JOLTS job openings also pointed to cracks in the labor market.
Powell’s “risk management” cut last month set the tone: the Fed is prioritizing downside risks to jobs, with futures now pricing a 97% chance of another 25 bp cut in October and ~87% odds of a second cut in December. At the same time, stronger Q2 GDP (+3.8% annualized) and firm consumption underscore that any easing will be gradual rather than rushed.
Elsewhere, while equities have been choppy, they are ending the week on firmer ground. Gold has surged to fresh record highs, while the dollar, after a brief bid, has resumed its broader downtrend into Q4. The bottom line: risk assets remain tethered to the macro data, but with the shutdown suspending key data, the Fed is being forced to set policy in the dark. Clarity will not return to markets until the data does.
Crypto: From Flush-Out to Uptober Flows
After September’s USD 1.7 billion liquidation washout, crypto has snapped back. BTC trades near 120,000, ETH above 4,400, both still shy of highs but underpinned by institutional demand. The shakeout flushed weaker hands, with BTC dominance back near 59% and ETH pullbacks proving shallow on treasury accumulation.
Flows have turned too: after September’s outflows, BTC ETFs have added USD 2.25 billion and ETH USD 1.06 billion this week, a clear vote of confidence. The US shutdown has only reinforced Bitcoin’s safe-haven narrative – politically agnostic and increasingly mainstreamed via ETFs and corporate balance sheets.
Meanwhile, the SEC final deadlines this month are looming on a slate of crypto ETFs. That said, the SEC has already missed its October 2nd deadline for the Canary LTC ETF, citing disruptions linked to U.S. government shutdown. How price action unfolds around these deadlines will be key – both in terms of near-term flows into the underlying tokens and the broader narrative of whether altcoins can follow BTC and ETH into a more institutionalized demand cycle.
The bottom line: With inflows back, majors resilient, and regulatory tailwinds building, October enters on stronger footing – and the seasonal “Uptober” trade has room to run.
Looking Ahead: Uptober, But With Hurdles
Crypto’s seasonal tailwind is here: October has been BTC’s strongest month historically.
But challenges remain. ETF inflows need to formally return and the shutdown-driven data blackout leaves markets navigating without their usual compass. For now, this week’s breakout shows buyers are still stepping in on weakness, but sustained direction will only come once macro clarity re-emerges.
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