The crypto market is on the uptrend, with Bitcoin and most altcoins hovering at their highest point in over a week.
Bitcoin (BTC) was at $112,866 — up 5.3% from $107,088 a week ago — while total market capitalization climbed 14% to $3.73 trillion from this month’s low of $3.24 trillion.
Most altcoins were up on Sunday, with the top gainers including Hyperliquid (HYPE), Virtuals Protocol (VIRTUAL), Zcash (ZEC), and Aerodrome Finance (AERO), which jumped by over 10% in the last 24 hours.
One reason why the crypto market is rallying is that the Bureau of Labor Statistics published an encouraging inflation report on Friday.
This report showed that the headline Consumer Price Index rose from 2.9% in August to 3.0% in September. Core inflation, which excludes the volatile food and energy prices, dropped from 3.1% to 3.0%.
These numbers boosted the odds that the Federal Reserve will cut rates in this week’s meeting. ING Bank analyst also predicted that the bank will cut rates again in December and probably end its quantitative tightening.
The rising hopes of an easy-money policy likely explains why the stock market soared, with the Dow Jones, S&P 500, and Nasdaq 100 indices hitting their all-time highs.
The crypto market rally is also happening as President Donald Trump begins a three-country tour in Asia. The hope is that the U.S. will ease trade tensions with China once Trump meets with Xi Jinping.
On Sunday, Trump arrived in Malaysia. He will meet President Xi at the APEC Summit in South Korea. Potential trade negotiations bode well for the crypto market and reverse the downtrend that occurred earlier this month when Trump threatened a 132% tariff on Chinese goods.
The main risk facing the crypto market is that the ongoing rally could be a dead-cat bounce. A DCB is a situation in which an asset in free fall bounces back temporarily before resuming the downtrend.
The bounce can happen within a few days, weeks, or even months. One reason why this may be a DCB is that the Bitcoin price has found substantial resistance at the 100-day moving average, a sign that the bull run is losing momentum.
Looking ahead, in addition to the Fed decision and Trump-Xi summit, the crypto market will react to the upcoming US big-tech earnings as companies like Apple, Microsoft, and Meta Platforms publish their results.
