A slight uptick in the cryptocurrency market is currently taking place as investors speculate that the Federal Reserve may reduce interest rates following disappointing employment figures and positive producer inflation statistics.
Overview
This crypto surge could face challenges, as Bitcoin has established precarious chart formations. It has created a bearish flag pattern on its daily chart and a significant rising wedge pattern on its weekly chart.
The price of Bitcoin (BTC) approached the resistance level of $114,000, while the total market capitalization for all cryptocurrencies soared to $3.95 trillion. Notable gainers included coins such as Pump, Mantle, and Wormhole.
Crypto Market Rally Driven by Anticipated Fed Rate Cuts and Altcoin ETF Approvals
The current rally in the cryptocurrency sector is largely fueled by expectations that the Federal Reserve will lower interest rates—potentially by 0.50%—in their upcoming meeting.
The likelihood of rate cuts increased after last Friday’s weak jobs report from the U.S., which indicated only 22,000 new jobs were added in August while unemployment rose to 4.3%.
We are experiencing a jobs recession. Although payroll employment saw slight increases in July and August after a decline in June, these gains appear marginal and may be revised downwards later. The goods-producing sectors like manufacturing, mining, and construction are significantly contracting…
— Mark Zandi (@Markzandi) September 5, 2025
Additionally, an encouraging producer inflation report was released by the U.S., showing an unexpected drop in both headline and core PPI for August according to data from the Bureau of Labor Statistics. This raises expectations that forthcoming CPI data might also fall short of predictions.
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If implemented, a cut from the Federal Reserve would theoretically benefit cryptocurrencies by enhancing liquidity levels while lowering bond yields and diminishing U.S dollar value.
An additional potential driver for this crypto rally could be multiple altcoin ETFs being approved by the Securities Exchange Commission next month—including those for Dogecoin, XRP, and Cardano—which would likely attract more investments from American traders into these assets.
Bearish Flag Pattern Signals Possible Retreat for BTC Price
BTC price chart | Source: crypto.news
The daily timeframe indicates that BTC remains confined within a narrow range below crucial resistance at $115K.
Bitcoin has developed a rising wedge pattern characterized by two upward-sloping converging trendlines following its decline from an all-time high of $124K; this formation contributes to creating what appears to be a bearish flag pattern—a setup often associated with further declines ahead.
Moreover,BTC has reached key support/resistance pivot points based on Murrey Math Lines suggesting it may retreat soon towards strong support around $100K.
A Massive Wedge Formed on Weekly Chart Points Towards Bearish Outlook
BTC price chart | Source: crypto.news
The most pessimistic projection regarding Bitcoin’s future can be observed on its weekly chart where it reveals formation since March last year indicating convergence between two lines forming an extensive wedge structure.
The Relative Strength Index along with MACD indicators have exhibited signs indicative of bearish divergence patterns typically preceding substantial downturns.
Consequently if these predictions hold true then we could see disruptions within ongoing rallies since historically BTC serves as primary catalyst influencing overall market trends!
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