Bitcoin traded at $86,757 on Friday, up 3% over the past 24 hours and 2% on the week, according to CoinGecko. After a September that broke the month’s reputation for losses, the asset opened October with force. Even so, it remains about 31% below the record high it set a year ago.
Cooling PCE data shifted rate expectations
The rally followed Wednesday’s inflation release. U.S. core PCE for August came in at 3.0%, below the 3.3% consensus forecast. After that print, markets repriced sharply toward a Federal Reserve hold at the Oct. 28 meeting.
CME’s FedWatch tool showed a 74% probability that the Fed will leave rates unchanged, up from 35.8% a week earlier. On Myriad, the prediction market owned by Decrypt parent company Dastan, traders put the odds at 75%. Nexo analyst Iliya Kalchev told Decrypt that as recently as Sept. 29, the market was still close to evenly split.
New York Fed President John Williams said Tuesday there was “no need for urgency” after September’s rate hike, though he kept one more increase later this year in his baseline outlook. Vice Chair Philip Jefferson said Thursday that policymakers needed more time and that future adjustments should follow incoming data and the balance of risks.
Tim Sun of HashKey said elevated Treasury yields had been capping Bitcoin, and that short covering added to demand once the price broke out of its range.
Labor market data painted a mixed picture
Initial jobless claims fell to 197,000 in the week ending Sept. 26, while continuing claims dropped to 1.7 million, both the lowest since March 2023. ADP private payrolls increased by 90,000, comfortably ahead of forecasts.
Friday’s official labor report was weaker. The Bureau of Labor Statistics said nonfarm payrolls rose by 29,000 in September, below expectations of about 90,000, and the unemployment rate edged up to 4.2%. July and August were revised lower by a combined 60,000, leaving July at a loss of 10,000. Average monthly job gains over the past year now stand at 45,000.
Decrypt noted that the analysts quoted in the story had commented before the release. A payroll number this soft strengthens the case for a pause, while raising the question the Fed has been trying to avoid: whether the labor market is starting to turn. The next key inflation reading, September CPI, is due on Oct. 14.
“Cooling inflation without labor weakness is generally supportive of risk assets, Bitcoin included,” Kalchev said.
Spot Bitcoin ETFs brought in $2.65 billion in September
According to SoSoValue, spot Bitcoin ETFs recorded $2.65 billion of net inflows in September, second only to August’s $3.52 billion since October 2025. Third-quarter net inflows reached $6.34 billion, and net assets stood at $109.3 billion.
Kalchev said inflows were recorded in 10 of the last 11 trading sessions, totaling roughly $3 billion.
That quarter largely reversed earlier damage. The funds lost $4.97 billion in the second quarter and $490 million in the first quarter, leaving 2026 net inflows still below $1 billion.
Sun said those inflows arrived even as the Fed delivered a 25-basis-point rate hike and the 10-year Treasury yield remained above 5%, showing the money was “not merely chasing liquidity, but are rather allocation-driven inflows.” He added that Morgan Stanley’s ETF took in more than $200 million last month, which he said signaled that “major investment banks’ wealth management systems are starting to incorporate Bitcoin into client asset allocation plans.”
Analysts split on how the market is positioned
The structure behind the move is still up for debate.
Kalchev said futures open interest was down about 12% from its Sept. 22 peak and sitting in the bottom decile of its one-year range, suggesting the latest advance is not leaning on leverage. Sun took the opposite view, saying open interest rose alongside price.
In options, Kalchev described “a market hedged against a drawdown but positioned for continuation,” with downside protection concentrated at $80,000 and below, and call positioning clustered in the $89,000 to $92,000 range.
“Uptober” optimism rises, but caution remains
Stephen Wundke of Algoz told Decrypt that October and November have historically been Bitcoin’s strongest months, a seasonal pattern traders call “Uptober.” Over the past decade, he said, Bitcoin has averaged an 18% gain in October and 46% across the quarter.
“Traders feel there is more upside currently than there is downside,” Wundke said. “There is a welter of money sitting on the sidelines waiting for more positive figures. If we get those softer figures and no rate rise, BTC will move very quickly and drag the rest of the quality assets with it.”
Still, the 10-year Treasury yield is at its highest level since 2002, and the Fed continues to project one more increase this year. That means a strong payrolls print or a hot CPI report could put December back in play. Wundke put the chance of an October hike at 40%, above the 26% implied by futures.
Owen Yang, chief executive of payments platform UPay, struck a more cautious tone. He told Decrypt that ETF flows and the U.S. Securities and Exchange Commission’s work on custody continue to support the institutional case, but added that “institutions entering at these price levels could mean less upside momentum.”
“Whether Uptober lives up to its name will depend on the macroeconomic environment and the Fed,” Kalchev said, “and Bitcoin is actively pricing those outcomes.”