Bitcoin and Ethereum experienced gains as markets rebounded from yesterday’s downturn, although the crypto sector remains under pressure.
Summary
- Crypto markets are recovering after the recent rate cut announcement
- The Federal Reserve is taking a more cautious approach regarding inflation, signaling no additional rate cuts
- Spot crypto ETF outflows hit $600 million as investors reevaluate risks
- Despite today’s rise, Bitcoin is heading towards its first “Red October” in seven years
Following a week of predominantly downward trends, the crypto markets are finally seeing an upswing. Bitcoin is now above $109,000, and Ethereum has reclaimed the $3,800 mark, with significant altcoins showing modest increases. However, this small recovery is overshadowed by a deteriorating macroeconomic outlook, as Bitcoin approaches its first “Red October” in seven years.
On Friday, October 31, Bitcoin (BTC) increased by 1.7%, trading at $109,225, recovering from the previous day’s decline. Ethereum (ETH) mirrored this trend, gaining 1.55% to trade at $3,826, while the majority of altcoins also posted gains.
Crypto market sentiment remains low as ‘Uptober’ falls short
The previous day saw Bitcoin drop to its weekly low of $106,000, despite the Federal Reserve’s decision to lower interest rates by 25 basis points. Although lower rates typically benefit the crypto market, most traders had anticipated this move.
Simultaneously, Fed Chair Jerome Powell indicated a more cautious perspective on inflation, suggesting that October’s rate cut may be the last of the year. This shift in sentiment coincided with significant ETF outflows; weekly Bitcoin and Ethereum ETFs reached $600 million by Friday, reflecting a decreased risk appetite in the crypto markets.
This development came amid already low sentiment surrounding crypto this week. The anticipated “Uptober,” historically known for October rallies, did not materialize, leading Bitcoin to decline 15% from its all-time high on October 6. This drop resulted in a monthly decrease of 6.5%.
