Market Commentary

Bitcoin closed September up 5.37%, while Ether fell 5.6%. After a firm start, crypto markets showed fatigue in a seasonally weak month, with the final week eroding much of the month-to-date gains. Mid-September saw ETH, SOL, and large-cap memecoins outperform Bitcoin after macroeconomic data pointed to a strong chance of a cut, and the FOMC delivered a 25-basis-point cut, in line with expectations and the first cut since December 2024.

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A significant deleveraging on 20 September culminated on 22 September with total liquidations up 380% to $632 million in 24 hours; the 4-hour long-to-short liquidation ratio hit 96% to 4%, one of the most lopsided readings recently, and about $6.3 billion was liquidated over the week, leaving leverage materially lower.

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Seasonality added a headwind, with September typically challenging for both crypto and U.S. equities, while a gold breakout and renewed demand for inflation hedges lent support to Bitcoin.

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Fundamentals were mixed but active. Stablecoins on Ethereum mainnet reached a record $149billion in market cap; Bitcoin hash rate hit a new high; and ETH validator queues flipped, with entries exceeding exits amid rising staking demand.

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SOL remained a notable outperformer, aided by Forward Industries’ $1.65 billion private placement led by Galaxy, Jump, and Multicoin; WLD and AVAX launched DATs.

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On policy and market structure: the SEC proposed an “innovation exemption” to fast-track crypto products; nine European banks, including ING, formed a euro-stablecoin consortium; Tether announced USAT to comply with the GENIUS Act; FTX prepared $1.6 billion in repayments; the stablecoin market cap neared $300B as TradFi and DeFi converged; and the race among perp DEXs intensified.

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Meanwhile, soft U.S. labor data and weaker PMI/ISM prints kept macro uncertainty elevated, and U.S. spot Bitcoin and Ether ETFs saw mixed flows with activity broadly in line with recent quarters.

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Market Outlook

An increasingly accommodative backdrop sets the stage for a stronger October, often called “Uptober.” The unemployment rate rose to 4.3%, a near four-year high, and markets are now pricing a higher probability of a third Fed cut this year. Lower policy rates could draw a meaningful share of the 7.4 trillion dollars parked in money market funds back into risk, supporting renewed momentum across digital assets.

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Breadth should improve if the United States proceeds with generic listings of altcoin ETFs, widening access beyond Bitcoin and Ether. Seasonality is a tailwind: Bitcoin has posted gains in October in each of the past six years and in nine of the past ten, and September’s result has historically had little bearing on October performance.

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A major technical upgrade adds to the constructive setup. The forthcoming hard fork is slated to:

• double blob capacity,
• introduce Peer Data Availability Sampling,
• lift the block gas limit to 150 million,
• implement Verkle Trees, and
• enhance EVM performance.

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These changes target higher throughput and better data availability, which can catalyze on-chain activity and bolster the case for an “Uptober” rally.

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Disclaimer: This content is for educational and informational purposes only and does not constitute trading, legal, or investment advice. It is directed at our followers in Switzerland and may not represent the views of FiCAS. The author may hold assets mentioned in this article and assumes no obligation or responsibility for any actions taken based on the information provided.

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