What factors contributed to Bitcoin approaching its all-time highs? A summary of today’s developments in cryptocurrency.

Bitcoin (BTC) was priced at $120,367.71 at the time of reporting, close to its peak of $124,000, influenced by anticipations of a rate reduction and a reset in market structure.

Weaker US labor indicators and an ongoing government shutdown have led traders to heavily favor another Federal Reserve cut this month, boosting risk assets across the market.

Concurrently, positioning in the cryptocurrency sector has been “cleaned up” following the expiration of quarter-end options, with flows and on-chain metrics transitioning from a defensive stance to a neutral-constructive outlook.

Bitcoin has risen by approximately 1.5% over the last 24 hours, having briefly touched $121,000 on futures before retracting.

Ethereum increased to $4,477.52, marking a 3% rise on the daily chart, while BNB jumped to $1,084.87 after a 5.7% gain.

Solana rose to $231.93 following a 4.4% boost, and XRP ascended to $3.0674, reflecting a 4% increase in the past day. Cardano’s daily rise of 2.2% brought its price to $0.8698, and Dogecoin achieved a 4.2% increase to $0.2596.

Growth catalysts

The macroeconomic impetus is clear. Data on private payrolls indicated an unexpected drop, leading to lower Treasury yields and enhancing the likelihood of a rate cut.

Glassnode’s report from October 2 provides insight into why the current rally appears more stable than previous squeezes. They observed that Bitcoin continues to adhere to the short-term holder cost basis, a level that has served as support since May.

At the same time, the price is contending with a substantial supply range between $114,000 and $118,000. Importantly, the distribution among long-term holders is easing, and ETF inflows have resumed, suggesting a stabilizing demand rather than a temporary surge.

Sentiment indicators such as the Short-Term Holder Realized Value (RVT) and the Fear & Greed Index have moderated, aligning with a phase of consolidation rather than capitulation.

In the derivatives market, last week’s record expiry reset positioning. As open interest begins to rebuild in the fourth quarter, implied volatility has decreased, skew is moving toward neutral, and the term structure remains in contango with a stronger back end.

Overall, the report described the environment as neutral yet constructive, awaiting a catalyst for the “next decisive move.” This environment corresponds with favorable macroeconomic conditions. Uncertainty surrounding the shutdown continues to heighten a “rates trade,” which may also postpone certain economic releases and keep markets leaning dovish.

To sustain momentum, the cryptocurrency market needs a series of positive spot ETF flow reports and clear indications that BTC can manage the supply overhang between $114,000 and $118,000 without reigniting long-term holder distribution.

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