Bitcoin began the fourth quarter with renewed momentum, after outperforming traditional assets in September. The cryptocurrency recorded notable gains as capital inflows into U.S. spot Bitcoin ETFs continued and macroeconomic conditions moderated, improving overall market sentiment.
Strong institutional demand in September
BTC rose about 6.4% throughout September, sharply outpacing the S&P 500, which gained only 0.2%. Meanwhile, gold declined 6.7% over the same period. The gap widened further over the third quarter, with Bitcoin gaining roughly 42.7%, compared to a 2.3% increase in the S&P 500 and a 3.7% fall for gold, according to data by Santiment Intelligence.
| Asset | September Change | Q3 Change |
|---|---|---|
| Bitcoin (BTC) | +6.4% | +42.7% |
| S&P 500 | +0.2% | +2.3% |
| Gold | -6.7% | -3.7% |
The broader crypto market also participated in the rebound, with certain altcoins seeing gains as investor capital rotated back into digital assets.
U.S. spot Bitcoin ETFs attracted $2.65 billion in net inflows in September, based on SoSoValue data. Although this was lower than the $3.52 billion brought in during August, it still reflected substantial investor interest in regulated Bitcoin products.
Institutional interest remained robust. Strategy, a digital asset management firm, increased its Bitcoin holdings by 1,665 BTC. These corporate treasury accumulations, together with ETF inflows, provided continued support for the market.
Mini dictionary: Strategy is a digital asset management company engaging in cryptocurrency investment strategies, including direct Bitcoin accumulation for treasury purposes.
Macroeconomic backdrop and Federal Reserve rate expectations
A softer inflation outlook contributed to improved risk asset sentiment toward the end of September. According to the U.S. Bureau of Economic Analysis, the personal consumption expenditures (PCE) price index increased 3.4% year over year in August, below economists’ 3.7% forecast. Core PCE inflation, which excludes food and energy, rose 3.0%, also below the expected 3.3%.
Following this data, Treasury yields declined, and traders reduced expectations for another Federal Reserve interest rate hike in October. Market pricing for a 25-basis-point hike fell to around 37%, compared to 51% a day earlier and close to 71% one week prior.
Mixed outlooks from research firms
10x Research, a crypto market analysis firm, indicated that October could mark the start of another rally for Bitcoin. The company argued that the bear-market low is now in place, and a catalyst-driven surge could develop in the coming period, rather than slow, gradual gains.
10x Research also projects that the broader crypto bull-market cycle could extend beyond the fourth quarter.
By contrast, cycle-based analysis from Galaxy Research suggested a less immediate bullish scenario. In a recent report, Galaxy Research pointed out that only four of its thirteen Bitcoin bottoming indicators have been triggered. The firm noted that Bitcoin typically reaches a cycle bottom 12 to 13 months after a previous peak.
Over the last cycle, Galaxy Research identified that Bitcoin tends to bottom 12 to 13 months following a cycle peak, placing their projected bottoming period around late Q4 2026 with a baseline scenario of prices between $40,000 and $46,000.
These contrasting perspectives highlight the uncertain outlook for Bitcoin’s next significant move. While ETF inflows and accumulating corporate demand suggest ongoing investor confidence, cyclic models indicate potential for further volatility before a clear direction is established.
