Bitcoin has rallied ahead of the news

Market overview

The crypto market has risen by 1.4% over the past 24 hours to $2.92T, after briefly peaking at $2.94T as stop orders were triggered at the start of the Asian session. Although the dollar strengthened, the move was driven by a flight from European assets, while the likelihood of an October policy tightening by the Fed continued to decline. This is the fourth consecutive month to start on a positive note, and October is historically a positive month for cryptocurrencies. Having consolidated in recent days, cryptocurrencies may attempt a fresh breakout, surpassing September's highs. Among the most popular coins, the top performers over the past 24 hours were Aave (+11.8%), Aptos (+7.2%) and Litecoin (+4.8%). The worst performers over this period were NEAR Protocol (−5.8%), IOTA (−1.3%) and Cosmos (−1.2%), with the ratio of rising to falling coins close to 3:1.

Bitcoin is attempting to break higher. On Thursday, it failed to hold above $85K, but on Friday morning, it pushed into the $86–87K range, coming close to the highs seen at the start of last week. If successful, the bulls may return to the previous scenario of a Fibonacci impulse extension with potential up to $94K. The release of US labour market statistics could, in theory, either accelerate the rally or reverse the trend. If the report is very strong, markets may once again price in a Fed rate rise in October, reducing demand for risk assets. And Bitcoin may prove to be quite sensitive to this.  

News background

Bitcoin has recorded its best third quarter since 2017, posting a 42.7% gain. According to SoSoValue, investors poured $6.34 billion into US spot Bitcoin ETFs over the three months, compared with outflows of around $5 billion in the second quarter.

The crypto market rallied following the failure of the CLARITY Act in the US Senate, as regulation by the SEC and CFTC has begun to move more swiftly and, in some respects, more favourably to the crypto industry, according to Bitwise. The main risk is that the current support for cryptocurrencies is not enshrined in law and could be revoked by a new US administration in 2029.

Citigroup has raised its 12-month forecast for Bitcoin from $82K to $113K, attributing the revision to increased activity in the crypto market, a favourable macroeconomic backdrop and the return of investors to ETFs. The target price for Ethereum has been raised from $2.24K to $3.03K.

The payment system Visa and the British banking group Lloyds tested round-the-clock settlements in the USDC stablecoin; transactions took less than an hour and were processed even at weekends. South Korea's Jeonbuk Bank has completed a test of cross-border transfers using stablecoins via a private channel on the Solana blockchain. However, details of the counterparties and transaction amounts were not published on the mainnet. 

Summary: The crypto market rose by 1.4% on expectations that the Fed would pause its rate hikes. Bitcoin is testing $86–87K and could target $94K. Support comes from ETF inflows and positive bank forecasts.