Crypto markets remained unchanged Monday and Tuesday after last week’s $1.5 billion liquidation flush, but traders remain cautious ahead of a critical run of U.S. economic data that could set the tone for October.
Bitcoin bulls defended the $110,000 support level several times over the past week, while Ether clawed back from a sharp dip to $4,075 that coincided with nearly half a billion dollars in leveraged longs being wiped out.
Total market capitalization now sits near $3.85 trillion, about 1.3% lower than a week earlier despite a 3.5% weekend rebound.
The Fed’s most recent rate cut initially provided a modest boost to Bitcoin, but investors say the path forward depends less on past easing than on Powell’s Tuesday speech and upcoming jobs data that is scheduled to be released on Friday at 8:30 a.m. (ET).
“The crypto market is at a macroeconomic crossroads, caught between a softening labor market and resilient economic growth,” said Nick Ruck, director at LVRG Research, in a message to CoinDesk.
“This week’s data — Consumer Confidence, Initial Jobless Claims, and the pivotal September Jobs Report — will be critical in gauging the Fed’s next move. Any signs of further labor market cooling could reignite rate cut expectations, providing a tailwind for majors like BTC, ETH, and XRP. Conversely, strong data may extend the current period of uncertainty and pressure,” he said.
Jobs data shows how many people are getting or losing work in the U.S. economy. If fewer people are working and unemployment rises, it suggests the economy is slowing.
That usually makes the Federal Reserve more likely to cut interest rates to support growth, which can boost risk assets like stocks and crypto. But if job numbers are strong and unemployment stays low, it signals the economy is still running hot. That can keep inflation high, making the Fed less likely to cut rates.
“This macro uncertainty is likely to maintain Bitcoin’s dominance, potentially capping the upside for Ethereum and the broader DeFi sector despite their superior yield opportunities,” Ruck added.
Market structure reflects the indecision. A guage for sentiment fell to 28 on Friday, entering “extreme fear,” before bouncing back to a neutral 50 by Monday. Bitcoin has consolidated in a tight $108,000–$118,000 range, with open interest compressed and funding rates normalized after the liquidations.
“The rebound is coming from roughly the same levels as in early September,” Alex Kuptsikevich, senior market analyst at FxPro, said in an email. “Once again, altcoins are recovering stronger than BTC. Such outperformance in the early stages of recovery often indicates the future winners of the race, which in this case are altcoins.”
Kuptsikevich noted Bitcoin’s technical levels remain pivotal: “At the end of last week, Bitcoin found support at 109,000. It was bought at roughly the same levels as the end of August and even slightly higher, which is positive for the bulls.”
“On the other hand, September’s local high is lower than the previous one, which generally indicates a decrease in volatility and a stronger movement towards a breakout beyond the $108-118K range. Movements within the range can give many false short-term signals,” he noted.
Ethereum faces its own inflection point. Analysts flagged a potential bottom, citing technical exhaustion after last week’s selloff. The token is also in focus after the launch of the first U.S. ETF with staking features, from REX Shares and Osprey Funds, with applications from BlackRock and Fidelity still under SEC review.
News around Solana added to the altcoin narrative. The network’s total value locked surged to $12.2 billion, up 57% since June, prompting fresh calls for a $300 price target. Meme coins have grown more prominent as well, with sector capitalization climbing 70% over three months.
Regulatory headlines, however, kept traders wary. The Wall Street Journal reported that U.S. regulators are probing potential insider trading tied to companies accumulating crypto reserves.
Elsewhere, ratings giant Moody’s separately warned that the rapid expansion of stablecoin use in developing countries poses risks to monetary sovereignty and financial stability.
