Bitcoin (BTC) declined by 0.4% to $122,220,
though the benchmark cryptocurrency has successfully broken above the
resistance at $117,000–$120,000 and retested it, signalling strong potential
for further gains. October, traditionally the best month for crypto markets,
has already delivered a 7.0% rise for BTC, peaking at 10.0% earlier in the
month. Historically, Bitcoin posts an average October increase of 21.0%, which
in the current context could mean another 13.0% upside, targeting around
$138,000. This outlook remains highly encouraging despite, or, perhaps, because
of the ongoing U.S. government shutdown. While shutdowns were once viewed as
risks for cryptocurrencies, they are now increasingly seen as threats to the
stability of the U.S. Dollar, with investors shifting toward assets such as
crypto and gold as alternative stores of value.
Last Wednesday’s ADP Nonfarm Payrolls data
showed a drop of 32,000 jobs in September. Although ADP figures tend to lean
pessimistic and are not always confirmed by official data, in the absence of an
official report due to the shutdown, the numbers are likely to be viewed by
investors and the Federal Reserve (Fed) as a negative signal supporting further
rate cuts. Bitcoin rose 10.7% last week, with most of the gains coming
immediately after the shutdown began and the weak ADP data was released.
In Japan, the ruling Liberal Democratic Party
elected Sanae Takaichi as its new leader, positioning her to become the
country’s first female prime minister. Known for her dovish stance and support
for accommodative fiscal and monetary policies, Takaichi is expected to pause
further Bank of Japan rate hikes, providing additional support for risky
assets, including cryptocurrencies.
This wave of optimism pushed Bitcoin to a new
all-time high of $125,799 on Sunday and then to $126,192 on Monday. A mild
correction followed on Tuesday as the S&P 500 slipped 0.3%, allowing BTC to
retest the broken resistance at $120,000. The retest was successful, confirming
the breakout and reinforcing the bullish outlook. The main risk ahead lies in
whether Fed Chair Jerome Powell returns to a more hawkish stance, though recent
economic data suggests the U.S. economy is cooling, leaving little
justification for such a move.
Institutional investors have increased their
exposure significantly. Last week, $1.33 billion flowed into Bitcoin ETFs,
including IBIT from BlackRock, FBTC from Fidelity, and GBTC from Grayscale, the
largest weekly inflow in months. This week saw an additional $879.5 million
added, underlining sustained institutional demand.
From a technical standpoint, Bitcoin’s outlook
has strengthened. The former resistance zone at $117,000–$120,000 has turned
into firm support, while the next intermediate target sits at
$127,000–$130,000. The primary upside objective remains in the
$155,000–$165,000 range.