Summary
- On Friday, Bitcoin reached a trading price of $86,757, reflecting a 3% increase in just 24 hours and a 2% rise over the week.
- August's core Personal Consumption Expenditures (PCE) index was reported at 3.0%, lower than the anticipated 3.3%, influencing futures that now suggest a 74% likelihood of the Federal Reserve maintaining interest rates at the upcoming October meeting.
- Bitcoin ETFs recorded $6.34 billion in inflows during the third quarter, although total net inflows for 2026 remain below $1 billion.
Bitcoin's price surged to $86,757 on Friday, marking a 3% rise over the past day and a 2% increase over the week, as per CoinGecko data. This follows a September that defied its usual negative trend, though Bitcoin's current value is still approximately 31% lower than its all-time high from the previous year.
This uptick aligns with the latest inflation data released on Wednesday. The August core PCE came in at 3.0%, below the expected 3.3%, leading to a shift in market expectations regarding the Federal Reserve's interest rate decisions. Current futures indicate a 74% chance of a rate hold at the Fed's meeting on October 28, a significant increase from just 35.8% a week prior. Traders on Myriad, a prediction market owned by the parent company of Decrypt, estimate a 75% chance for the same outcome. Nexo analyst Iliya Kalchev noted that earlier, the odds were evenly split as of September 29.
New York Fed President John Williams remarked on Tuesday that there was "no need for urgency" following the September interest rate hike, while Vice Chair Philip Jefferson emphasized the necessity for more time to assess the economic data and the associated risks. Tim Sun from HashKey attributed Bitcoin's previous price caps to high Treasury yields and noted that short covering contributed to the buying momentum once Bitcoin broke out of its trading range.
Jobless claims dropped to 197,000 for the week ending September 26, with continuing claims also decreasing to 1.7 million, the lowest since March 2023. Meanwhile, ADP private payrolls increased by 90,000, surpassing expectations.
However, Friday's official labor report showed a less favorable outlook, with nonfarm payrolls rising by only 29,000 in September, falling short of the estimated 90,000, according to the Bureau of Labor Statistics report. The unemployment rate slightly increased to 4.2%, and revisions for July and August showed a combined downward adjustment of 60,000, leading to an average monthly gain of only 45,000 over the past year. Analysts commented prior to this release, with a weaker jobs report potentially reinforcing the case for maintaining current interest rates, while also raising concerns about a potential shift in the labor market. The Consumer Price Index (CPI) for September is set to be released on October 14. Kalchev stated, "Cooling inflation without labor weakness is generally supportive of risk assets, Bitcoin included."
Myriad: Predict how high Bitcoin will go. Click here to share your prediction.During the third quarter, Bitcoin ETFs saw $2.65 billion in inflows in September alone, making it the second highest month since October 2025, and totaling $6.34 billion for the quarter, as reported by SoSoValue. Net assets now stand at $109.3 billion, with Kalchev noting inflows on 10 of the last 11 sessions, amounting to around $3 billion.
This recent influx has helped recover some losses from earlier in the year, as funds had experienced a $4.97 billion outflow in the second quarter and a $490 million outflow in the first, leading to net inflows for 2026 remaining below $1 billion.
Despite a 25-basis-point rate hike and a 10-year yield exceeding 5%, Sun observed that the money flowing into Bitcoin ETFs is driven by strategic allocations rather than just liquidity chasing. Morgan Stanley’s ETF attracted over $200 million last month, indicating that major investment banks are beginning to integrate Bitcoin into their asset allocation strategies for clients, according to Sun.
Analysts have differing views on market positioning. Kalchev reported a 12% decrease in futures open interest from its peak on September 22, now in the lower decile of its one-year range, suggesting that the recent price increase is not heavily reliant on leverage. Conversely, Sun noted that open interest has risen alongside Bitcoin's price. Kalchev remarked that options data indicates a market hedged against a price decline but prepared for further upward movement, with protection set at $80,000 and call options ranging from $89,000 to $92,000.
Looking Ahead to Uptober
Historically, October and November are known to be strong months for Bitcoin, a trend dubbed Uptober, with an average gain of 18% in October and a remarkable 46% over the quarter in the past decade, as stated by Stephen Wundke of Algoz. He added that "traders feel there is more upside currently than downside." Wundke expressed that there is significant capital waiting on the sidelines for more positive economic indicators. If softer data is released and no interest rate hike occurs, Bitcoin could rise swiftly, potentially pulling up other quality assets as well.
Currently, the 10-year Treasury yield is at its highest since 2002, and the Fed still anticipates another rate hike this year, meaning a strong jobs report or a high CPI could lead to a rate increase in December. Wundke estimates the likelihood of an October rate hike at 40%, considerably higher than the 26% suggested by current futures.
Owen Yang, CEO of payments platform UPay, took a more cautious stance, noting that while ETF inflows and the SEC's custody developments are beneficial for institutional interest, "institutions entering at these price levels could mean less upside momentum."
Kalchev concluded that whether Uptober meets expectations will hinge on the macroeconomic landscape and the Federal Reserve's decisions, with Bitcoin actively reflecting these potential outcomes.