Bitcoin surged 12.14% last week, erasing September’s losses and leading a fresh crypto market rally. Unlike earlier rallies driven by altcoins, this time Bitcoin spearheaded the move. Ethereum (ETH) and Solana (SOL) also gained 12.90% and 13.24%, respectively, but Bitcoin’s momentum stood out amid shifting macroeconomic signals.
The rally began after the U.S. government shutdown started Wednesday at midnight EST. With federal operations halted, investors anticipated heightened economic uncertainty and potential Federal Reserve intervention. Market expectations for an October interest rate cut soared from 89% to 98%, according to CME Group’s FedWatch Tool. Bitcoin, which had hovered near $112,000, quickly climbed as traders priced in looser monetary policy.
Adding fuel to the rally, U.S. employment data disappointed. The ADP report for September showed a loss of 32,000 jobs versus an expected gain of 50,000, reinforcing concerns about a weakening labor market. Analysts now anticipate up to four additional Fed rate cuts by mid-2026. Political moves to reduce federal employment further increased speculation about rising unemployment and faster rate easing.
Global factors also influenced Bitcoin’s momentum. In Japan, newly elected Liberal Democratic Party leader Sanae Takaichi is expected to pursue policies that weaken the yen, a shift from her predecessor’s tightening stance. This expectation of broader monetary easing drove Bitcoin above $125,500 over the weekend — a new all-time high.
Investors now await key U.S. events: Treasury bond auctions totaling $249 billion, Fed Chair Jerome Powell’s Thursday speech, and the release of FOMC minutes. Despite short-term liquidity concerns, optimism for rate cuts continues to support Bitcoin’s bullish outlook. As global liquidity expectations rise, Bitcoin remains a leading hedge against economic uncertainty, reinforcing its dominance in the digital asset market.
