'Uptober' Kicks Off With Massive Bear Liquidations

Only two days into October, we're already seeing an impressive performance by cryptocurrencies. To kickstart the last quarter of the year, most digital assets jumped in price, which ultimately led to a wave of bear liquidations across all exchanges. 

Over $700 million in short positions were liquidated during the first two days of October, including a single $11 million liquidation on Hyperliquid from a trader who had bet that the Ethereum market would decline. 

Data: CoinGlass

The cryptocurrency market capitalization is up by over 6% since the end of September. The collective value of all digital assets hit $4.11 trillion earlier today, marking its highest point since August 13.

Total Market Cap - 4H

Pretty much all currencies in the top-100 cryptos are now at a profit, a performance that's starting to show signs that the market will not only erase September's losses but also head to a strong end to 2025.

Bitcoin Reclaims $120k

The market-leading cryptocurrency has since reclaimed the $120,000 zone, hitting its highest value in over 40 days. $BTC is currently trading at precisely $120,562, up by 10.30% over the past four days.

BTC/USD - Coinbase - 4H

While Bitcoin is starting to show signs that it may face stronger resistance at the $120k margin, the currency is now well-positioned to think about price discovery in the short term.

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Bitcoin Dominance Going Down

Despite Bitcoin gaining a significant amount of value over the last few days, Bitcoin Dominance, ie, the percentage how much of the market that is made up of BTC, is surprisingly going down.

BTC.D - 4H

Over the last two days, the dominance of Bitcoin over the market slipped by over 0.7%. In that period, BTC.D dropped from 59.20% to the current 58.77%.

When the market rallies, we’re used to seeing Bitcoin surge first, followed by capital rotating into lower-cap assets. But in this short-term bull run, the drop in Bitcoin dominance suggests liquidity is flowing directly into altcoins as well.

In fact, most altcoins are seeing a double-digit increase in the week. Ethereum gained a whopping 14.80% in value in the last seven days, while assets like HYPE, DOGE, and SOL are seeing even more profitable results.

The market is Pricing More Rate Cuts.

Tuesday's ADP Nonfarm Employment Change revealed that the American labor sector is down badly. ADP reported a 32,000 job loss in September, and revisions show weakness going back to June. This week's print missed the mark by a long mile, as the forecasts predicted an actual increase of 52k jobs.

Source: Investing

The softer labor market reignited expectations that the Fed will continue to lower interest rates this year. Less than a month before the next FOMC meeting, analysts are now all in on the idea of lower rates.

The CME Fed Watch tool is now showing a 97.8% chance that the Federal Reserve will lower rates again on October 29.

Amid a government shutdown in the U.S., macro uncertainty is still high over financial markets. However, if the start of October is any indication, the crypto market is showing that risk appetite may be slowly coming back.