U.S. Services PMI Drops Close to Pandemic Lows, Heightening Expectations for Fed Rate Reductions – Potential Influence on $150K Bitcoin?

U.S. services activity unexpectedly decelerated in September, causing the ISM services PMI to drop to 50 and heightening the likelihood of imminent Fed rate reductions.

This macroeconomic shift could potentially catalyze a new upward movement for Bitcoin, reinstating a $150K target.

The ISM services report for September indicated significant weakness overall, with the Business Activity index dipping into contraction at 49.9, and New Orders experiencing a sharp decline, suggesting that growth in the service sector is stalling.

*US SEPT. ISM SERVICES PMI FALLS TO 50 FROM 52; EST. 51.7
*US ISM SERVICES BUSINESS ACTIVITY AT 49.9, LOWEST SINCE 2020
*US SEPT. ISM SERVICES PRICES PAID INDEX RISES TO 69.4 VS 69.2
*US SEPT. ISM SERVICES NEW ORDERS INDEX FALLS TO 50.4 VS 56

— Bloomberg Breaking News (@Top_Bloomberg) October 3, 2025

Macro Context with PMI, Labor, and the Fed Could Trigger a Bitcoin $150k Rally

With U.S. labor market indicators also showing signs of weakness and Core PCE inflation remaining at 2.9%, its first occurrence at this level in three decades, the chances of Fed rate cuts have increased.

Markets now anticipate at least two cuts starting as early as the October FOMC meeting, with an additional cut possible before the conclusion of 2025.

The macroeconomic environment has already contributed to Bitcoin reaching a 50-day high of $123,841, marking an over 11% increase during October’s so-called “Uptober” surge.

This shift in expectations serves as a significant bullish catalyst for risk assets, including Bitcoin.

Source: TradingView

Compounding the policy landscape, the Fed’s balance sheet has significantly contracted from its pandemic-era peak, now at its lowest level since April 2020, following approximately $2.3T of runoff since 2022.

Source: YCharts

The transition from quantitative tightening (QT) to a potential easing bias is part of the reason analysts are considering a shift back into risk-on positioning. Monetary easing and the anticipation of more favorable financial conditions have historically boosted risk assets and speculative investments.

When macro liquidity and derivatives demand align, price discovery can accelerate rapidly. Major banks and research institutions have adopted a bullish outlook on BTC’s potential in this context.

Standard Chartered recently indicated that Bitcoin could reach $135K soon and possibly hit $200K by year-end.

Simultaneously, demand for spot ETFs, increasing options activity related to ETFs, and a growing proportion of long-term holders (those who have retained their assets since the ETF approvals) are altering market dynamics away from pure short-term leverage towards more sustainable demand.

Spot ETFs Post $1.08B in Volume as Bitcoin Open Interest Hits $45.3B

Spot Bitcoin ETFs recorded $1.08 billion in volume over the past four days, indicating that institutional inflows remain strong.

Concurrently, Bitcoin Open Interest has reached an all-time high of $45.3 billion, representing the largest leverage accumulation the market has ever experienced.

On-chain data reveals another bullish trend, with an increasing share of long-term holders who have maintained their BTC for 18 months to two years.

Further supporting the bullish narrative, there are reports that President Trump is contemplating new stimulus checks of $1,000–$2,000 funded through tariff revenues.

JUST IN: President Trump considers sending US taxpayers up to $2,000 stimulus checks using tariff revenue. pic.twitter.com/puadqg5tCx

— Remarks (@remarks) October 2, 2025

A similar initiative in 2021 contributed to the last significant bull run, during which Bitcoin surged from $17,572 to its then-record $69,000.

If confirmed, new fiscal stimulus would provide an additional substantial liquidity boost to markets already anticipating Fed easing, potentially accelerating Bitcoin’s path toward $150K and beyond.

Bitcoin Technicals Flash Green With $120K Breakout and Highest Weekly Close Ever

Bitcoin’s current structure resembles previous “price discovery” phases, characterized by strong ETF inflows, record open interest, resilient spot demand, and aggressive futures buying.

Analysts suggest BTC may be entering Price Discovery Uptrend 3, historically the phase where major bull runs develop.

#BTC
Bitcoin is on the verge of entering Price Discovery Uptrend 3$BTC #Crypto #Bitcoin https://t.co/DW2lWhG70H pic.twitter.com/qnxplTIUEZ

— Rekt Capital (@rektcapital) October 3, 2025

As long as Bitcoin remains above $120K and the Fed implements rate cuts, the setup favors continued upward movement.

Analyzing the weekly chart of Bitcoin, the technical indicators display clear signs of strength.

The price has consistently held the 20-week moving average as support, which has historically been one of the most dependable levels for maintaining long-term bullish trends.

Source: TradingView

The recent movement also saw Bitcoin decisively surpass the $112K downtrend resistance, a level that had constrained momentum for several weeks.

This breakout now establishes the groundwork for further upward movement.

What makes the current setup significant is that Bitcoin is on track for the highest weekly close in its chart history, as the ongoing weekly candle is already indicating a 7% gain.

With these technical confirmations aligning, the likelihood of Bitcoin reaching $150K this quarter appears increasingly plausible.

The post U.S. Services PMI Sinks Near Pandemic Lows, Increasing Fed Rate Cuts Odds – Catalyst for $150K Bitcoin? appeared first on Cryptonews.