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Bitcoin price is once again regaining strength, shooting by more than 3.55% in the last 24 hours, and surging past $115,500 levels. On the other hand, the yellow metal, Gold, continues to slide, moving to retest the support at $4,000. Both assets move in opposite directions as risk-on sentiment picks up with expectations of Fed rate cuts, ahead of the start of the FOMC meeting on October 28.
Bitcoin Takes The Baton From Gold For Q4 Rally
Gold prices have declined sharply while Bitcoin continues to rally. This signals a major shift in market sentiment. Over the past seven days, gold has declined by 8.5%, while Bitcoin has surged by 11.5%. Thus, the investor appetite for risk assets is improving amid positive macro conditions.
BTC price is once again showing strength, up 2.55% at $115,000 as of press time. Today’s upside is accompanied by a 100% surge in daily trading volumes to $50.4 billion, indicating strong bullish sentiment among traders. Furthermore, the Coinglass data shows that the BTC futures open interest has surged past $75 billion, showing strong bullish sentiment among traders.
As BTC and Gold have moved in opposite directions, veteran economist Peter Schiff has once again challenged the ‘Digital Gold’ narrative for BTC. He wrote:
US-China Trade Talks Boost Crypto Market Sentiment
Furthermore, today’s BTC price upside follows the positive developments in US-China trade talks over the weekend. Investors are reacting to major developments from China as officials confirm progress toward a new trade agreement with the United States.
China’s Vice Minister of Commerce announced that both nations have reached a “consensus” on key trade issues. This includes export controls, tariff suspensions, fentanyl-related measures, anti-drug cooperation, trade expansion, and U.S. Section 301 fees.
On the other hand, U.S. Treasury Secretary Bessent stated that China is “ready” to finalize a trade deal following two days of negotiations. He added that Beijing plans to make “substantial” purchases of U.S. soybeans as part of the agreement.
This improving macro environment has triggered a strong upside for Bitcoin and altcoins today. Ethereum (ETH) price is up by a strong 7.32% at $4,232, with its market cap soaring past $510 billion. Popular crypto analyst Javon Marks noted that with ETH regaining levels above $4,204, it’s preparing for a significant run-up all the way to $8,000.
Other altcoins have also joined the party with Solana (SOL), Dogecoin (DOGE), and Cardano (ADA), all gaining 5-6%. The overall risk sentiment has already turned positive with the much-anticipated 25 bps Fed rate cuts this week.
Institutions Fill Their Bitcoin Bags Before Fed Rate Cuts
New on-chain data suggests that the current Bitcoin cycle differs sharply from those seen in 2017 and 2021. This time, as retail hands weaken, institutions are playing a dominant role.
According to the latest data, retail BTC holdings have remained flat or slightly declined since mid-2024. However, large investors have steadily expanded their positions, reaching new all-time highs.
In previous market cycles, large wallets typically reduced exposure near price peaks. However, this cycle marks a reversal, with institutional wallets continuing to accumulate as retail supply shrinks. This is largely driven by robust Bitcoin ETF inflows and accelerating institutional adoption.
Additionally, all eyes are on the much-anticipated 25-basis-point Fed rate cut coming this week during the FOMC meeting. According to market expectations, Fed Chair Jerome Powell is expected to announce another rate cut after September. This could officially mark the end of the quantitative tightening (QT) measures and move towards quantitative easing (QE). Market experts believe that a total of 50 basis points of Fed rate cuts will occur before the end of the year.
