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Bitcoin Surges on Weak Jobs Data and Rising Fed Rate Cut Odds
Bitcoin has staged an impressive comeback, rallying 12.14% last week and erasing the losses it suffered in a tepid September. Unlike the altcoin-led rallies earlier this year, this latest bull run is being spearheaded by Bitcoin itself, signaling a potential shift in market leadership.
Shutdown Sparks Rally as Rate Cut Odds Soar
The catalyst behind the surge? A combination of macroeconomic uncertainty and growing speculation around Federal Reserve policy. On Wednesday, the U.S. government officially entered a shutdown, halting federal operations and spending. This sudden freeze triggered a sharp uptick in market expectations that the Fed would be forced to cut interest rates at its next FOMC meeting in late October.
According to CME Group’s FedWatch Tool, the probability of a rate cut jumped from 89% to 98% within hours of the shutdown confirmation. Around the same time, Bitcoin broke out of its $112,000 range, launching into a rapid climb that peaked above $125,500 over the weekend—a new all-time high.
Weak Jobs Data, Political Shifts Add Fuel
Further bolstering the rally was disappointing U.S. labor data. The ADP Employment Report showed a shocking -32,000 jobs for September, far below the +50,000 expected. As concerns about the labor market deepen, traders are now pricing in up to four additional rate cuts by June 2026.
The political backdrop added another layer to the story. The Republican Party’s push for more federal layoffs, a move echoing goals from the Trump era, has intensified fears of rising unemployment, currently at 4.3%.
Meanwhile in Japan, Sanae Takaichi’s election as head of the Liberal Democratic Party also played a role. Her expected policies to weaken the yen contributed to bullish sentiment for Bitcoin as global liquidity prospects improved.
All Eyes on Bond Auctions and Powell
With $249 billion in U.S. Treasury bonds hitting the market this week and Fed Chair Jerome Powell set to speak Thursday, traders remain on high alert. Whether Bitcoin can sustain its momentum amid a potential liquidity crunch is a key question for the week ahead.
