Bitcoin Price Surge Continues as Fed Rate Cut Probability Hits 99%: Market Analysis

Cryptocurrency markets are extending gains this week following disappointing U.S. employment data and a government shutdown, with traders increasingly confident the Federal Reserve will implement rate cuts next month. Bitcoin has climbed 2.15% to $118,700, while the CoinDesk 20 index rose 2.33% despite traditional market uncertainties. The rally was triggered by an unexpected decline in U.S. private payrolls, with ADP data showing a 32,000 job loss in September versus expectations of 50,000 growth. With official labor statistics unavailable due to the government shutdown, traders are relying on this data to inform their positions, resulting in increased rate cut expectations. Polymarket data indicates 91% probability of a 25 basis point Fed rate cut this month, while CME's FedWatch tool shows 99% odds. "Markets have demonstrated relative stability during the initial 24 hours of the U.S. government shutdown," noted Philipp Zentner, CEO of LIFI Protocol. "The 2018-2019 35-day shutdown saw similar market resilience." This stability combined with accommodative macroeconomic conditions benefits risk assets including cryptocurrencies. Derivatives markets reflect this shift with open interest increasing nearly 4% to $216 billion according to CoinGlass. Spot crypto ETFs have recorded over $2.3 billion in net inflows this week per SoSoValue data. However, some experts caution about structural risks. Justin Wang, Zeus Network co-founder, warned that "strategies utilizing stock premiums to acquire bitcoin are reaching limitations. Sustainable institutional Bitcoin adoption requires infrastructure independent of market sentiment and stock premiums." As the shutdown continues and economic indicators become less clear, investors are increasingly turning to alternative assets like gold and cryptocurrency. XYO co-founder Markus Levin observed Bitcoin's price action displays "a classic Elliott Wave completion within a rising wedge, typically indicating consolidation before significant movement." "Institutional flows and derivatives activity will be crucial in determining whether this pattern results in new highs or deeper retracement. Regardless, we're entering one of Bitcoin's historically most volatile periods, and market participants should prepare for price fluctuations," Levin concluded. Market participants should monitor these key developments: - U.S. Jobless Claims data (delayed due to shutdown) - ENS DAO, Arbitrum DAO, and Gitcoin DAO governance votes concluding October 2 - Ethena (ENA) token unlock worth $23.65 million - DoubleZero (2Z) exchange listings - Ongoing crypto conferences including TOKEN2049 Singapore and Stablecoin Summit 2025