Market Analysis
Recently, mainstream crypto assets have quickly retraced after reaching new highs. Bitcoin (BTC) has fallen from around $124,000 at the beginning of the month to about $109,000, a drop of over 10%; Ethereum (ETH) has pulled back from its yearly high of about $4,900 to around $3,850, a decline of about 20%. After experiencing fluctuations, sentiment has somewhat recovered but remains cautious, with the Fear and Greed Index hovering around 45; the passive deleveraging of long positions has largely been completed, and the selling pressure from forced liquidations has significantly eased from its peak. On the technical front, BTC has found initial support around $109,000. If it fails to hold this level on the daily chart, bears may target the $108,000–$105,000 range; however, if it reclaims and stabilizes above $116,000, the probability of retesting $120,000 and even $124,000 increases.
The $4,000 level for ETH is an important psychological barrier, with $3,900 serving as a more direct support level. A drop below this could trigger technical selling pressure down to $3,800. Momentum indicators show that the mid-term structure has not been damaged: BTC's daily RSI is around 41, and while the MACD remains weak, it has clearly risen from the trend lows since June. As long as BTC holds the $110K–$112K area and ETH stays above $4K, the pullback is more likely to be defined as a phase of consolidation before an upward move, rather than a trend reversal.
Market Interpretation
Moderate Easing Provides a Liquidity Base, but Path Dependence on Data and Rhythm
On September 17, the Federal Reserve lowered the federal funds rate range by 25 basis points to 4.00–4.25%, characterizing this move as a "risk management" easing: the decline in inflation and slowing employment momentum provide room for a tentative rate cut. Historical experience and market pricing point to an expectation of further easing of 50–75 basis points cumulatively by 2025. The weakening dollar and falling real interest rates together enhance the relative attractiveness of risk assets, highlighting the role of crypto assets as an "elastic factor" in global asset allocation. It is important to emphasize that restarting rate cuts may correspond to a soft landing, but it does not rule out the risk of a lagging decline in growth; asset prices' forward pricing of liquidity means that trading needs to follow the trend rather than bet on a single path, dynamically adjusting risk budgets by tracking inflation stickiness, marginal changes in employment, and fiscal variables.
On-chain Capital Structure is Shifting from "Short Money" to "Long Money"
The market capitalization of stablecoins is expected to exceed $250 billion by mid-2025, with USDT recovering to above $150 billion. In the second half of the year, net inflows into stablecoins continue, and exchanges are well-stocked with "gunpowder," increasing the willingness to buy on dips. On the Bitcoin side, net outflows from exchanges in September surged by about 347% month-on-month, with long-term addresses continuing to accumulate. The balance on exchanges has decreased from about 2.6 million coins in 2023 to about 2.1 million coins by June 2025, tightening supply has increased price sensitivity to incremental funds. On the Ethereum side, staking accounts for about 31%, with over 860,000 coins queued for staking recently, leading to about 4.7 million ETH newly locked, further shrinking the circulating supply. Long-term holders' NUPL has entered the "belief/denial" zone, with MVRV around 2.08, indicating no systemic overheating yet. The simultaneous occurrence of capital migration and supply contraction means that mid-term price elasticity is greater than equivalent demand changes, providing a marginal safety cushion for allocation.
Low Implied Volatility and Bearish Skew Resonance, Selling Volatility Strategies Gain Winning Probability but Require Tail Protection
After a sharp drop, short-term implied volatility (IV) briefly surged and inverted the term structure, then returned to low levels with spot price fluctuations. Overall, IV levels are in a historically low range, and ETH's relative volatility premium over BTC remains. The front-end 25Δ risk reversal has turned negative, with OTM put implied volatility higher than calls, reflecting short-term hedging demand and a premium related to the price-volatility correlation on the downside. Strategically, range expectations combined with low IV support selling straddles/strangles and calendar spreads as neutral selling volatility combinations, while buying deep out-of-the-money tail options or constructing ratio spreads to hedge against "jump risk." A bearish skew indicates relatively favorable pricing for out-of-the-money puts, allowing spot holders to use cash-secured puts to accumulate at lower target prices while earning premiums; the phenomenon of perpetual contract funding rates remaining mostly positive suggests a "cautious long—defensive hedge" divergence between spot/perpetual and options pricing, indicating that structured hedging should be prioritized to smooth out the repricing risks caused by this misalignment.
Altcoin Market is Selectively Prosperous, Prioritize Liquidity and Discipline
The Altseason indicator has risen above 75, with funds flowing from BTC to ETH and several strong public chains and thematic sectors. BTC dominance has dropped from about 65% mid-year to around 59%. Market excitement is concentrated in main themes like AI, RWA, and GameFi, with the phase of new coins and MEME surges increasing trading noise and volatility, but it has not evolved into a comprehensive bull market. Strategically, using BTC/ETH as a base to hedge systemic volatility, participating in high-elasticity themes with small positions, emphasizing liquidity first and a clear take-profit and stop-loss framework, can help avoid chasing highs during the impulse phase driven by new listings and narratives.
Risk Management is a Necessary Condition for Generating Excess Returns in This Phase
In a "beginning of easing + range oscillation" environment, efficiency can be achieved through tool-based offense and defense. For investors who are bullish and wish to accumulate in batches, Matrixport offers a variety of structured financial products to respond to different market conditions, aiming for steady gains.
The Accumulator helps smooth costs by accumulating daily at preset prices around key support levels; for investors with heavy positions who wish to realize profits in an orderly manner, the Decumulator can reduce impact and timing errors by cashing out in stages at resistance levels. In phases of low IV and dominant range volatility, FCN achieves "earning interest even when the market is stagnant" through embedded options, and if triggered, can convert to the agreed target, enhancing static yield; daily dual currency provides flexible rolling tools for short-term "earning interest + conditional rebalancing," helping automate the exchange of target prices between different currencies. By modularly combining the above tools, such as using FCN as the core for interest, cash-secured puts for defensive accumulation, Accumulator for low-level absorption, Decumulator for high-level realization, and a small proportion of thematic exposure for tactical positioning, one can enhance both Sharpe ratio and drawdown control without sacrificing liquidity.
At the same time, it is essential to continuously track the Federal Reserve's rate cut rhythm, inflation stickiness, and employment rebalancing, while being alert to front-end volatility spikes triggered by geopolitical events; selling volatility positions should control nominal Vega/Theta and daily VaR, presetting automatic sensitivity reduction mechanisms for abnormal volatility, and using spreads or deep out-of-the-money options to guard against tail risks; Altcoin positions should adhere to the execution principle of "liquidity first, small positions, quick steps." Overall, the key phrases for the current phase are "defend key levels, earn range waves, leave upside options." Supported by a moderately easing liquidity base and an on-chain capital structure shifting from short to long, the mid-term bullish framework for BTC/ETH remains intact; using specialized structured tools for offense and defense can balance returns, elasticity, and risk resilience during the rebalancing after a pullback.
Matrixport, as a leading global cryptocurrency financial services platform, offers "personalized structured products" tailored to different types of investors. Whether investors are miners looking to cash out profits, institutions seeking stable returns, or seasoned VIP investors pursuing innovative strategies, Matrixport can create crypto financial solutions that meet the needs of investors with varying risk appetites.
The above content is from Daniel Yu, Head of Asset Management, and represents the author's personal views only.
Disclaimer: The market carries risks, and investment should be approached with caution. This article does not constitute investment advice. Trading in digital assets may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided in this content.
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