Bitcoin Today News: Strong U.S. economic data weakens interest rate cut expectations, BTC falls below $110,000, can Vanguard ETF's change in stance release new demand?

Recent strong economic data from the United States, including a quarterly economic growth of 3.8% that exceeded expectations and a stable labor market, has weakened market expectations for multiple rate cuts by the Fed in the fourth quarter. This macro headwind has led to cautious sentiment among institutional investors, triggering massive capital outflows from [BTC]https://www.gate.com/buy-bitcoin-btc( and )https://www.gate.com/buy-ethereum-eth[ETH] Spot ETFs, with nearly $900 million net outflow from BTC ETFs in one week, pushing BTC below $110,000 and ETH below $4,000. Although the news of Vanguard planning to open access to encryption ETFs may bring long-term Favourable Information, the short-term market trend will mainly depend on key data to be released this week, such as the U.S. employment report and ISM services PMI, which will directly affect the Fed's interest rate decisions in October and the outlook for risk assets.

Strong US Economy: Challenges to Fed Rate Cut Expectations

Recent U.S. economic data has shown strong performance, weakening market expectations for multiple rate cuts by the Fed in the fourth quarter, thereby putting pressure on risk assets such as BTC.

· Economic Expansion and Employment Stability: The U.S. economy expanded at a quarterly rate of 3.8% in the second quarter, and as of the week ending September 20, the number of initial unemployment claims fell to 218,000, down from 232,000 the previous week. These data indicate that the U.S. economy remains resilient and the labor market is stable.

· Inflation pressure continues: The core PCE price index in the US rose by 2.9% year-on-year in August, unchanged from July, indicating that inflation remains high.

· Hawkish signals: In an environment of high inflation and a strong economy, the market worries that the Fed may adopt a more hawkish interest rate path, and higher borrowing costs typically suppress demand for risk assets like Bitcoin.

Institutional capital outflow accelerates: BTC falls below $110,000

Under the influence of changes in the expected interest rates in the U.S., institutional demand for the U.S. BTC Spot ETF has significantly weakened, leading to a large outflow of funds and pushing the BTC price to correct.

· Continuous outflow of ETF: In the week ending September 26, the BTC Spot ETF experienced a net outflow for four consecutive days, with a total net outflow amounting to 897.6 million USD. On September 26 (Friday) alone, the outflow reached 418.3 million USD.

· Price Correction: The outflow of funds and the fading expectations of interest rate cuts led to the BTC price falling from $115,292 on September 22 to $109,780 on September 26, breaking through the key psychological level of $110,000.

· ETH fell below $4,000: Ethereum (ETH) was also affected, breaking through the psychological barrier of 4,000 dollars. ETH Spot ETF experienced a net outflow of 795.8 million dollars in the week ending September 26, with a cumulative net outflow of 377.5 million dollars for the month.

Potential Favourable Information: Vanguard's Position Shift

Despite short-term outflows of institutional funds, asset management giant Vanguard plans to lift the ban on its brokerage platform customers purchasing cryptocurrency ETFs, bringing potential positive factors to the market. Cryptocurrency commentator Joe Consorti believes that Vanguard's $11 trillion in capital could be unlocked, which would release about $74 billion in potential inflows if its customers' allocation ratio matches that of BlackRock.

This Week's Focus: US Employment Report and Services PMI

The upcoming week is crucial for the encryption market, as key labor market and service industry data will influence the Fed's interest rate decision in October.

· ISM Services PMI: Market forecasts that the ISM Services PMI will stabilize at 52 in September. Since the services sector accounts for about 80% of the U.S. GDP, the rise in this index (along with higher employment and price components) will indicate strong economic momentum, supporting the Fed's hawkish stance.

· US Employment Report (Friday): The employment report is the focus of this week. Strong wage growth, non-farm payrolls exceeding expectations, and a stable unemployment rate all suggest that monetary policy will pause adjustments. Conversely, a weak labor market may reinforce the Fed's expectations of a rate cut in October, boosting market sentiment.

Technical Analysis and Price Scenarios

( Bitcoin )BTC### analysis

(Source: TradingView)

BTC is currently trading below the 50-day exponential moving average (EMA), but still above the 200-day EMA, indicating a short-term bearish but long-term bullish momentum.

· Bullish scenario: Weak U.S. economic data, dovish statements from the Fed, progress on the "Market Structure Bill", or inflows into ETFs. These factors may drive BTC towards the historical high of $123,731.

· Bearish Scenario: Concerns over stagflation intensify, Fed's hawkish signals, legislative setbacks, or continuous outflows from ETF funds. These factors may drag BTC towards the key psychological support level of 100,000 dollars.

· Key technical level: The upward target is to break through 110,000 and hold above the 50-day EMA. The downside risk is to fall below the 200-day EMA.

( Ethereum ) ETH ### analysis

ETH is also below the 50-day EMA but above the 200-day EMA.

· Upside target: Break through the resistance level of $4,085, targeting the 50-day EMA, and could ultimately challenge $4,500.

· Downside risk: If it falls below 3,750 USD, it may drop towards the support level of 3,563 USD and subsequently the 200-day EMA.

Conclusion

This week's key U.S. economic data, particularly the upcoming employment report and ISM services PMI, will become the core catalysts determining the short-term fate of the encryption market. Amid strong economic data and inflationary pressures, market bets on a Fed interest rate cut have significantly decreased, leading to a large outflow of funds from BTC and ETH Spot ETFs. This macro pressure indicates that the encryption market is currently in a highly sensitive period, where only weak labor market data can truly strengthen the Fed's dovish stance and potentially reverse the current price correction, giving Bitcoin a chance to retest its historical highs. Do you think Vanguard's entry can offset the current macroeconomic headwinds and the pressure from ETF fund outflows, becoming a key factor in supporting BTC prices?