TL; DR

• In October 2025, the U.S. entered a monetary easing cycle, with the Federal Reserve cutting interest rates and pausing balance sheet reduction. However, economic recovery remained weak, affected by high inflation, a sluggish job market, low consumer confidence, and intertwined government and external risks impacting growth. Although inflation has eased, it remains above target, and weak employment and fiscal constraints have diminished the short-term stimulative effects of easing policies on consumption and investment. Overall, the U.S. is in the early stages of a loosening cycle, with an improved policy environment, but uncertainties regarding inflation, employment, and external risks continue to pressure economic recovery.
• The cryptocurrency market experienced significant volatility in October, with trading volume surging to $428.2 billion during the "10·11" crash, marking a monthly peak. Afterward, trading became subdued, with weak liquidity and declining risk appetite. The overall market capitalization slightly decreased by 0.57% compared to the previous month, maintaining fluctuations after a sharp pullback, with cautious market sentiment and insufficient incremental funds. Newly launched tokens primarily focused on infrastructure, DeFi, and AI projects, while Chinese meme coins gained short-term popularity but showed limited sustainability.
• In October, Bitcoin and Ethereum spot ETFs saw net inflows of $5.55 billion and $1.01 billion, respectively, with market confidence recovering somewhat after the black swan event, but overall sentiment remained cautious. The total circulation of stablecoins increased by $9.38 billion, with USDT and USDC being the main sources of growth, while USDE saw a significant decline in circulation by 31.1% due to the decoupling event.
• Bitcoin's short-term momentum weakened, with prices failing to stabilize above the 50-day SMA, currently fluctuating near the 20-day EMA. If it breaks below the $107,000 support, it may accelerate down to $100,000, while $118,000 remains a key resistance level. Ethereum showed overall weakness, with prices falling below the 50-day SMA; if it breaks the descending triangle support, it may further drop to $3,350. If it returns above the 50-day SMA, bulls may push for a rebound, but resistance remains strong. Solana showed clear back-and-forth trading, failing to stabilize above the 20-day EMA; if it breaks and holds above, it may rise to the channel resistance line, while a drop below $190 would favor bears, potentially falling to $177 or even testing the lower channel boundary.
• The cryptocurrency market experienced the largest liquidation in history in October, with Bitcoin, Ethereum, and altcoins plummeting due to Trump's tariffs and the USDe decoupling event. The total liquidation amount reached a new high of $19.1 billion, indicating systemic leverage risk exposure. Chinese meme coins rapidly gained popularity on Binance and within the Solana and Base ecosystems, with projects like "Binance Life" seeing a short-term surge in market capitalization and attracting many new traders, becoming a phenomenon. The launch of the x402 protocol drew market attention, with related project prices soaring in the short term but then retreating, indicating that the enthusiasm for innovative concepts is concentrated and highly volatile.
• Next month, the prediction market is expected to continue accelerating expansion, with projects like Polymarket, Kalshi, and Truth Predict driving increased industry liquidity and attention, while capital and public chain ecosystem layouts are also accelerating. Although the cryptocurrency market was structurally damaged after the black swan event on October 11, expectations of trade easing and favorable policies provide support for the short-term return of risk assets. Future focus should be on the performance of new projects in the prediction market, progress in U.S.-China trade, changes in the dollar and liquidity environment, and leverage risks in the cryptocurrency market.

1. Macroeconomic Perspective

In October 2025, the U.S. economy entered a loosening cycle, but recovery momentum remained weak. The Federal Reserve cut interest rates consecutively and announced a pause in balance sheet reduction, shifting policy focus from suppressing inflation to stabilizing growth and preserving employment, reflecting concerns over economic slowdown. Inflation remains high, with a persistently weak job market, declining consumer confidence, government shutdowns, and external risks intertwining, resulting in a state of "policy has loosened, growth has not yet taken off." Overall, the U.S. is at an early turning point in the cycle, with an improved policy environment, but macroeconomic recovery still requires time.

Policy Shift

In October, the Federal Reserve cut interest rates by another 25 basis points, lowering the federal funds rate to a range of 3.75%–4.00%, and announced a pause in balance sheet reduction to release liquidity and strengthen the effects of easing. This marks a comprehensive shift in monetary policy towards growth orientation. The current decision-making logic emphasizes prioritizing growth stabilization, with the Federal Reserve believing that inflation risks are relatively controllable, while deteriorating employment and fiscal uncertainty pose more urgent challenges. The market expects another rate cut may occur within the year, but policy transmission will still take time, making it difficult to quickly stimulate consumption and business investment in the short term.

Inflation Still Above Target

In September, the CPI rose 3.0% year-on-year, with core CPI also at 3.0%. Although this is below expectations, it remains above the Federal Reserve's 2% target. Prices for food, housing, and services continue to rise, indicating that endogenous inflation has not fully dissipated. Powell emphasized in a statement that while inflation is trending towards moderation, policies cannot relax vigilance too early. If inflation declines slow down, the Federal Reserve may delay further easing. Inflation is temporarily controllable, but the target range has not yet been achieved.

Job Market Further Weakening

The rapid cooling of the labor market has become the core inducement for this round of easing. Due to the U.S. government shutdown, the Bureau of Labor Statistics suspended the release of September non-farm employment data, leaving the market lacking key references. The latest available data from August shows that job growth has significantly slowed, with only 22,000 new jobs added. Additionally, June data was revised down to negative growth. The weak labor market is undermining support for consumption and the service sector, exacerbating the deterioration of household income expectations. The market is generally concerned that if employment continues to worsen, the economy will fall into a deeper growth decline, forcing the Federal Reserve to adopt more aggressive easing measures.

Political, Fiscal, and External Risks Persist

The U.S. government has shut down due to the failure to pass a budget, with some departments halting pay and operations, weakening fiscal spending and data transparency. Geopolitical frictions continue, including tensions in the Middle East and U.S.-China technology conflicts, which increase risk premiums. Fiscal and external uncertainties weaken the marginal effectiveness of monetary easing, making the pace of market recovery more sluggish. While easing provides short-term support, the transmission channels for policies are obstructed, and corporate confidence and long-term investment recovery remain limited.

Outlook

The U.S. is in the early stages of a loosening cycle, with an improved policy environment, but economic recovery has not yet stabilized. The future focus will be on whether inflation can continue to decline, whether employment can stabilize, and whether easing policies can effectively transmit to consumption and investment. The fiscal deadlock, geopolitical risks, and market confidence remain major uncertainties.

2. Overview of the Cryptocurrency Market

Cryptocurrency Data Analysis

Trading Volume & Daily Growth Rate

According to CoinGecko data, as of October 27, the overall trading volume in the cryptocurrency market showed significant fluctuations. During the "10·11" crash, market sentiment surged sharply, with trading volume soaring to $428.2 billion, a 106% increase month-on-month, marking a monthly peak, as funds were released in panic and speculation. Outside of this period, overall market trading became subdued, with trading volume mostly maintaining in the range of $150 billion to $200 billion, indicating a decline in investor risk appetite and a cautious sentiment. The liquidity appeared slightly weak, with the market lacking sustained incremental funds entering, requiring macro and policy favorable factors to restore stronger upward momentum.

Total Market Capitalization & Daily Growth

According to CoinGecko data, as of October 27, the total market capitalization of cryptocurrencies was $3.94 trillion, down 0.57% from the previous month. From the beginning of the month to October 9, the total market capitalization of cryptocurrencies continued to rise slightly, increasing from $3.96 trillion to $4.32 trillion, reflecting a gradual return of funds under temporary favorable conditions. However, from October 10 to 11, the market experienced a sudden downturn, with a daily decline exceeding 9%, marking the largest pullback of the month, indicating panic selling of funds during the "10·11" market. Although the market briefly rebounded afterward, rising about 5.7% at its peak, the overall rebound strength was limited, with market capitalization fluctuating in the range of $3.7 trillion to $3.9 trillion. Overall, the market has stabilized after experiencing a sharp adjustment, with increased cautious sentiment and insufficient willingness for incremental funds to enter, remaining in a fluctuating phase.

Newly Launched Popular Tokens in October

The newly launched popular tokens in October were mainly concentrated in infrastructure, DeFi, and AI sectors, primarily consisting of VC-backed projects. Among them, projects like Enso, Recall, Falcon Finance, YieldBasis, and ZEROBASE performed prominently, with active trading volumes post-launch. Additionally, the Chinese meme sector saw a short-term surge driven by the "Binance Life" effect and CZ's endorsements, with the launch of Binance contracts further fueling its sentiment.

3. On-Chain Data Analysis

Analysis of BTC and ETH ETF Inflows and Outflows

October BTC Spot ETF Net Inflow of $5.55 Billion

In October, Bitcoin spot ETFs continued the trend of capital inflows, with monthly net inflows reaching $5.55 billion, increasing total assets to $149.9 billion, a month-on-month growth of 3.8%. Bitcoin's price slightly rose from $108,936 at the end of September to $110,070, an increase of 1%. After the black swan event on October 11, market confidence has improved somewhat, but overall changes remain limited, still in a sluggish environment.

October ETH Spot ETF Net Inflow of $1.01 Billion

Ethereum spot ETFs recorded approximately $1.01 billion in net inflows in October, with total assets growing to $26.6 billion, a month-on-month increase of 3.9%. ETH's price rose from $3,839 to $3,904, an increase of 1.69%.

Analysis of Stablecoin Inflows and Outflows

October Stablecoin Total Circulation Surge of $9.38 Billion

Although the overall market for stablecoins remained in an inflow state and continued to grow in October, market confidence was severely undermined by the black swan event on October 11. Notably, USDE saw a significant reduction in circulation by nearly 31.1% due to price decoupling during the black swan event, leading to skepticism about its algorithmic stablecoin mechanism. On the other hand, the total circulation of stablecoins increased by $9.38 billion, reaching $281.25 billion. USDT increased by $10.15 billion in a single month, continuing to hold the top position. USDC (+$2.23 billion) also became a major source of growth.

4. Price Analysis of Major Currencies

BTC Price Change Analysis

Bitcoin failed to hold above the 50-day Simple Moving Average (SMA, $114,278), triggering new selling pressure and causing the price to drop back below the 20-day Exponential Moving Average (EMA, $112,347). This indicates that short-term momentum is beginning to weaken, and market sentiment is becoming cautious. If BTC's closing price remains below the 20-day EMA, bears may further exert pressure, pushing the BTC/USDT price toward the key support level of $107,000. Bulls are expected to defend this level vigorously, as a loss of this support would confirm a "double top" pattern and could trigger a price acceleration down to the psychological level of $100,000.

On the upside, $118,000 remains an important resistance that bulls need to overcome. If the price can break through and stabilize above this level, it will release strong upward momentum, pushing BTC towards the historical high of $126,199. Before that, the market may maintain a fluctuating pattern near the moving averages, accompanied by increased short-term volatility.

ETH Price Change Analysis

Ethereum fell back again after reaching the 50-day SMA ($4,220), indicating that bears are still actively selling at high levels, and the overall trend remains weak. The current price is approaching the support line of a descending triangle, which is a key position for determining the short-term direction. If this support is effectively broken, ETH/USDT may further drop to $3,350 or even lower.

If bulls can reclaim the price above the 50-day SMA, it would indicate that short-term momentum is recovering. At that point, the price is expected to rebound to the upper boundary of the descending triangle, where selling pressure is anticipated to be very strong. Only if Ethereum can successfully break through this resistance line and stabilize above it will a new upward trend be initiated, confirming a mid-term reversal signal.

SOL Price Change Analysis

Solana briefly broke through the 20-day EMA ($196) but failed to maintain the upward momentum, indicating insufficient buying power at high levels. The current 20-day EMA is flattening, and the RSI indicator is fluctuating near the neutral zone, suggesting a tug-of-war between bulls and bears. If buyers can push the price and close steadily above the 20-day EMA, SOL/USDT is expected to rise further to the channel resistance line. If this area is successfully broken, it will significantly enhance bullish expectations in the market.

Conversely, if the price falls below $190, it would indicate that bears have regained dominance. In this case, SOL may retreat to $177 and further test the lower support of the ascending channel. If support is found and stabilized here, it may indicate that funds are beginning to accumulate at lower levels; however, if the support is lost, the adjustment range may widen.

5. This Month's Hot Events

The cryptocurrency market experienced the largest liquidation in history, triggered by Trump's tariffs and the USDe decoupling, leading to a chain reaction of crashes.

On the evening of October 10, U.S. President Trump unexpectedly announced a 100% tariff on Chinese imports starting November 1, while canceling the planned U.S.-China meeting during the Asia-Pacific Economic Cooperation (APEC) summit, causing severe fluctuations in global financial markets. U.S. stocks initially rose and then fell, with the Dow Jones Industrial Average rising 283 points before plummeting 887 points, and the Nasdaq index dropping over 3.5%. The chain reaction in risk assets led the cryptocurrency market to experience a sharp decline within hours, with Bitcoin dropping to $102,000 and Ethereum hitting a low of $3,392. The total liquidation amount reached a historic high of $19.1 billion. According to Coinglass data, over 1.62 million people were liquidated globally, with long positions liquidating $16.7 billion and short positions nearly $2.5 billion. Altcoins were hit hardest, with many dropping over 80%, and some small tokens nearing zero. The stablecoin USDe briefly decoupled to $0.60 on Binance before recovering to above $0.99.

This round of market crash was not only triggered by macro policy shocks but also revealed systemic risks due to the shortage of funds among market makers. After the collapse of Jump, market makers took on many projects that were originally serviced by Jump, but with limited funds, they prioritized Tier 0 and Tier 1 large projects, causing small altcoins to lose support during the market sell-off. The high-interest circular lending activities of USDe were concentrated and liquidated under extreme selling pressure, amplifying leverage and triggering a chain liquidation, further exacerbating market panic.

Chinese Meme

In early October 2025, Binance co-founder He Yi's social media post "Wishing you a Binance life" unexpectedly ignited the creative enthusiasm of the Chinese crypto community, giving rise to a meme coin called "Binance Life." This concept rapidly spread within the community and was boosted by KOLs, skyrocketing to a market capitalization of $500 million within just a few days, with an increase of 6,000 times, forming a phenomenon. According to DeFiLlama statistics, daily trading volume on BNB chain DEX surged to $6.05 billion, attracting over 100,000 new traders.

Notably, the public chains Solana and Base, which are major hubs for memes, have also seen a rise in popular Chinese memes recently. Solana's official Twitter stated that its Chinese name is "Suolala," leading to the emergence of related Chinese memes. The market capitalization of "Base Life" on Base also surpassed ten million, and some small-cap Chinese memes have appeared on Base. It seems that from "Binance Life" to projects like "Cultivation" and "Customer Service Xiao He," Chinese memes have already established a certain position in the cryptocurrency market. With the continued expansion of the BSC ecosystem and more creators participating, it is expected that more new meme projects inspired by Chinese topics, character images, or internet trends will emerge.

x402 Protocol

x402 is an AI payment protocol jointly launched by Coinbase and Cloudflare, inspired by the long-unused HTTP status code "402 Payment Required." The core innovation of the protocol lies in embedding payment logic into web interaction processes, making payment a part of internet communication, forming a new model of Payment as Interaction. Through x402, AI agents, API services, and web applications can complete instant stablecoin payments directly within standard HTTP requests. Due to its natural support for stablecoins, small and frequent transactions, and low latency, x402 is suitable for AI agents to buy data, tools, and computing power on-demand, allowing Web2 services to connect to on-chain settlements with minimal changes, eliminating the need for multiple hurdles like registration, email, or complex signatures.

Although the x402 concept became a hot topic in the market within just two days of its launch, driving significant price increases for several related projects, with typical projects like PING's price rising nearly 20 times in two days, reaching a market cap of $80 million, and Payai's market cap peaking at $70 million, its popularity quickly receded after a week. Several popular projects saw nearly 80% deep corrections from their peaks. However, this concept has not faded away. With the successive launch of new tokens like Kite and Pieverse, market attention towards the x402 ecosystem is expected to be reignited.

6. Outlook for Next Month

Prediction Market Enters Accelerated Expansion Phase

From 2024 to 2025, the prediction market sector has entered a phase of explosive growth. Projects like Polymarket and Kalshi, representing the "dual leaders," continue to lead the industry, with daily trading volumes repeatedly surpassing $100 million, and cumulative trading volumes reaching hundreds of billions. On the capital front, Polymarket and Kalshi completed new rounds of financing at valuations of approximately $9 billion and $5 billion, respectively, marking a critical turning point for the prediction market from marginal innovation to mainstream financial infrastructure.

In October, Trump's media company TMTG announced its official entry into the prediction market through the Truth Social platform, launching the Truth Predict service. This will not only further expand the influence of the prediction market in U.S. politics and public opinion but may also become a milestone event in the integration of traditional social media and the crypto prediction market. Meanwhile, capital and public chain ecosystem layouts are also accelerating. YZI Labs invested in two prediction market projects—Opinion and Apro—this month; the prediction market protocol Limitless, in which Coinbase invested, officially issued its token this month, currently valued at approximately $350 million. The active entry of mainstream institutions and leading ecosystems indicates that the prediction market is transitioning from an early "crypto niche experiment" to a next-generation financial market infrastructure centered on liquidity, compliance, and composability. Future focus should be on the market performance of tokens from projects like Limitless, Opinion (not yet issued), and Apro, which may bring new discussion hotspots in the current market lacking popular narratives.

Market Recovery After the October 11 Black Swan Event

Since the "black swan" event on October 11, the cryptocurrency market has shown significant structural damage, and it may still maintain a state of high volatility and high risk in the short term. On October 30, Trump met with Xi Jinping, easing tensions between the U.S. and China; the next day, the U.S. Senate passed a resolution with 51 votes in favor and 47 against, aimed at terminating the comprehensive tariff policy implemented by Trump globally. This change in policy is a positive signal for the market, expected to release trade easing expectations and improve risk appetite. However, the structural damage has not been immediately repaired: although the tariff system was "voted down" by Congress, the actual implementation and the comprehensive trade agreement between the U.S. and China remain uncertain, and the policy's implementation still carries uncertainty. Additionally, the U.S. government has shut down due to the failure to pass a budget, with some departments halting pay and operations, weakening fiscal spending and data transparency. The cryptocurrency market is highly dependent on macro liquidity, the strength of the dollar, geopolitical factors, and regulatory expectations, with multiple variables still in play.

Looking ahead, if trade relations genuinely warm up and drive the recovery of the real economy, it could provide a trigger point for the return of crypto assets as "risk assets." If policy implementation lags or new frictions arise, it may still trigger capital withdrawals and renewed market volatility. In this context, key areas to focus on include: first, the progress of U.S.-China trade negotiations and the specific timeline for tariff removal/restoration; second, the trends of the dollar, changes in the liquidity environment, especially the transmission effects of U.S. monetary and foreign exchange policies; third, the use of leverage in the cryptocurrency market and liquidation risks, as in a structurally damaged environment, passive liquidations of leverage can easily trigger chain reactions.

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