Bitcoin Rises 2.5% as Ethereum Nears $4,000
At the same time, the U.S. dollar index slipped slightly to 98.40, giving a further boost to dollar-denominated assets such as bitcoin.
Quick overview
- The crypto market experienced a sharp rebound, driven by positive developments in Japan and China, along with expectations of Federal Reserve rate cuts.
- Bitcoin rose 2.5% to around $110,400, while Ethereum gained 1% near the $4,000 mark, with notable altcoin performances from Chainlink, XRP, and Polkadot.
- Japan's coalition agreement and China's GDP growth of 4.8% contributed to improved market sentiment, while the U.S. dollar index's decline further supported dollar-denominated assets.
- Analysts remain optimistic about cryptocurrencies, with a high probability of the Federal Reserve lowering rates in October and December, pending the upcoming inflation report.
The crypto market rebounded sharply in the past few hours after days of heavy liquidations, supported by encouraging signals from Japan and China and growing expectations of further rate cuts by the Federal Reserve before year-end.
Bitcoin (BTC) is up 2.5% in the past 24 hours, trading around $110,400, while Ethereum (ETH) has gained 1%, hovering near the $4,000 mark, according to Binance data.
Across the altcoin universe, gains were broad-based. Notable performers include Chainlink (+10.7%), XRP (+5.3%), and Polkadot (+4.1%).
Drivers Behind the Rally
The rebound was fueled by two key developments in Asia, which also lifted sentiment on Wall Street.
First, Japan’s ruling Liberal Democratic Party reached a coalition agreement with the Innovation Party, paving the way for Sanae Takaichi to become the country’s first female prime minister on Tuesday.
Second, China reported GDP growth of 4.8% in the third quarter—the slowest in a year but still above expectations. While the figure represents a moderation from 5.2% in Q2, the year-to-date growth rate has already met Beijing’s 5% annual target.
At the same time, the U.S. dollar index slipped slightly to 98.40, giving a further boost to dollar-denominated assets such as bitcoin.
Gold prices remained steady near $4,200, a sign some analysts interpret as potential exhaustion of the metal’s bullish trend—a pattern that has historically preceded renewed strength in BTC.
Fed in Focus
Despite recent volatility, analysts remain optimistic about the outlook for cryptocurrencies, particularly bitcoin. Markets are increasingly pricing in continued monetary easing by the Federal Reserve, with expectations for two more rate cuts in 2025.
According to the CME FedWatch Tool, investors assign nearly a 100% probability that the U.S. central bank will lower its benchmark rate in both October and December.
This week will be crucial for confirming that outlook, as the September inflation report in the United States is set to be released. The data will be a key input for the Fed’s next moves amid a challenging backdrop shaped by the ongoing U.S. government shutdown, which has delayed official economic updates.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save