Crypto Rebounds Amid US Shutdown, Fed Dovish Narrative
The crypto market rallied on Wednesday, led by Bitcoin, which rose around 2-3% and briefly approached US$116,000-117,000. Ethereum, Solana, and XRP also rallied in the 3-6% range. The gains occurred amid the US government shutdown, which triggered a weakening dollar and prompted some investors to seek riskier alternative assets or assets outside fiat. Fourth-quarter seasonality, historically positive for crypto, also supported daily sentiment.
Fundamentally, ADP data showed the US private sector lost around 32,000 jobs in September, reinforcing expectations of a Fed rate cut in the coming months. The "lower-for-longer" interest rate narrative boosted risk appetite and depressed yields, conditions typically conducive to crypto assets. However, the shutdown has the potential to delay the release of key economic data such as nonfarm payrolls, so market direction could change quickly if uncertainty persists. Short-term volatility remains high, especially if official data releases are delayed and Fed communications are mixed with market speculation.
On the regulatory front, market participants are also monitoring the discourse surrounding stablecoin regulation. Bank of England Governor Andrew Bailey emphasized that widely used stablecoins need to be treated like bank money—from depositor protection to access to reserve facilities—which has the potential to change the risk and adoption landscape in the UK. As macro factors (dollar, yields) and regulatory news compete, the crypto rally is likely to continue, although a technical correction remains possible.
Source: Newsmaker.id
