The pullback in Bitcoin and Ethereum, analysts said, appears to be a short-term corrective phase within a broader bullish structure
The surge comes amid sustained institutional inflows, as investors grow increasingly optimistic about potentially supportive signals from the US Federal Reserve
The token climbed to as high as $125,689 on Sunday in Asia, topping its previous record set on Aug. 14, supported by the uptick in US equities
The crypto market rally aligns with historical trends. October, often called 'Uptober' in the crypto space, has traditionally been bullish, with Q4 typically delivering strong gains
The rebound in the crypto markets, analysts said, suggests cautious institutional re-entry, but also underlines that macroeconomic signals and ETF flows will remain pivotal
The broader altcoin market mirrored the weak sentiment, with Story (IP) continuing its sell-off to emerge as the day's biggest laggard, plunging 28 per cent
The market's flagship assets - Bitcoin (BTC) and Ethereum (ETH) - remain largely range-bound, which in turn has capped momentum across other altcoins
On the macro front, comments from the US Federal Reserve Chair have shifted the narrative, signaling a greater emphasis on labor market stability over aggressive inflation control
Despite the volatility, analysts suggest this correction is not a sign of fundamental weakness, but rather a leverage flush, a natural reset following an extended rally
The bulls failed to intensify volatility over the past weekend, and as a result, Bitcoin's price dropped below $112,00
After weeks of strong gains, the crypto market, analysts said, is experiencing a natural pause, driven by profit-taking and a cooling of derivatives positions
The rate cut also triggered over $105 million in market liquidations, reflecting a spike in trading activity and market volatility
While short-term positioning remains cautious, analysts believe institutional demand through spot ETFs is lending support to the upside
Despite the modest gains, sentiment around the short-term outlook, analysts said, remains cautious
BTC dominance has slipped to 57.3 per cent, while the CMC Altcoin Season Index has climbed to 62/100, which analysts suggest are early signs of capital rotation into altcoins
Analysts suggest the muted price action reflects investor caution ahead of the upcoming US CPI release, which could influence the Fed's next policy decision
Market analysts attribute the the cautious optimism to a balance between consolidating price action and renewed corporate activity
Ethereum, on the other hand, is lagging slightly but sits at a key breakout point, holding $4,300 support and now retesting its descending trendline
This bullish momentum comes on the heels of US President Donald Trump signing an executive order to expand 401(k) access to alternative assets, aiming to improve returns and diversification
For BTC to regain bullish momentum, analysts believe that a confirmed breakout above $116,000 is necessary.