Can Bitcoin Defy September’s Bearish History as Fed Rate Cut Looms?

Altcoins Join the Rally: XRP and Solana Lead

Beyond Bitcoin, top altcoins like XRP and Solana (SOL) have also bounced, each posting at least 2% daily gains. Solana, in particular, is up more than 7% on the week, signaling a stronger rebound compared to Bitcoin and Ethereum.

Other leading cryptocurrencies, including Ethereum (ETH), Dogecoin (DOGE), and BNB, remain mixed on the day but are benefiting from the broader market shift.

Macro Tailwinds: Dollar Weakness and Fed Rate Cuts

Analysts point to macroeconomic factors driving the rebound. A weaker U.S. dollar has supported risk-on assets, while markets are increasingly confident that the Federal Reserve will cut interest rates by 25 basis points on September 17.

“The depreciation of the U.S. dollar has bolstered risk-on sentiment and encouraged capital flows into assets like cryptocurrencies,” Ryan Lee, chief analyst at Bitget, told Decrypt. He added that expectations of Fed rate cuts reduce the opportunity cost of holding non-yielding assets such as Bitcoin and Ethereum.

On-chain data also supports this shift: declining Bitcoin exchange reserves, lower BTC dominance, and accumulation of Ethereum by Satoshi-era whales have reinforced bullish sentiment.

Options Market Signals Cautious Optimism

Despite the rebound, derivatives markets paint a complex picture. Sean Dawson, head of research at Dervie, that options traders are betting on upside with increased open interest at the $120K, $130K, and $140K strikes for the September 26 expiry.

“Since market makers are net long gamma, an increase in Bitcoin's price will most likely be dampened by hedge selling,” Dawson told Decrypt. “Similarly, price drops will also be minimized as dealers would be forced to buy to hedge their positions.”

Bitcoin’s implied volatility over the next 30 days remains subdued near 30%. Yet, demand for downside protection has increased, with the one-week 25 delta skew jumping from 6.75 to 12 overnight, showing that investors are hedging against sudden shocks.

Employment Data Will Set the Tone for September

The upcoming Nonfarm Payrolls report is now seen as the key catalyst for Bitcoin’s next move. Analysts stress that the labor market data will heavily influence the Fed’s tone later this month.

A jobs report in the 90K–120K range could validate cooling labor conditions and solidify a dovish Fed cut, potentially pushing Bitcoin higher, according to Derek Lim, head of research at Caladan. But a stronger-than-expected report above 150K, or signs of tariff-driven wage pressures, could push the Fed to delay cuts or strike a hawkish tone—even if it reduces rates—triggering volatility.

As Dawson concluded, while a September rate cut appears priced in, failure to deliver or a hawkish message from the Fed could make September “a lot more painful” for crypto investors.