Macroeconomic political risk has become a top-level variable in the crypto market that cannot be ignored, and the path to future bull markets will be more tortuous.
Author: Hotcoin Research
Cryptocurrency Market Performance
Currently, the total market capitalization of cryptocurrencies is $3.63 trillion, with BTC accounting for 58.9%, or $2.13 trillion. The market cap of stablecoins is $307.1 billion, with a recent 7-day increase of 0.95%. The number of stablecoins continues to grow, with USDT accounting for 59.1%.
Among the top 200 projects on CoinMarketCap, most have declined while a few have risen, including: TAO with a 7-day increase of 44.64%, MORPHO with a 7-day increase of 35.26%, IP with a 7-day increase of 21.8%, TRAC with a 7-day increase of 54.64%, and RSR with a 7-day increase of 47.38%.
This week, there was a net outflow from U.S. Bitcoin spot ETFs of $1.225 billion; and a net outflow from U.S. Ethereum spot ETFs of $311.8 million.
Market Forecast (October 20 - October 24):
The current RSI index is 42.95 (neutral range), and the fear and greed index is 22 (lower than last week, in the fear range). The altcoin season index is 37.
BTC core range: $104,000 - $112,000
ETH core range: $3,600 - $4,100
SOL core range: $175 - $210
In the first half of the week, the market experienced a rebound following Powell's statement about "soon stopping the tapering and continuing to cut rates in the future," but began to decline in the second half of the week.
Has the foundation of the bull market been shaken?
Not completely disproven: The core driving forces of this bull market (such as changes in the global monetary landscape and institutional adoption) are structural, and a short-term shock triggered by geopolitical events is not enough to completely reverse the long-term trend. However, the path has changed: this event has taught all investors that macroeconomic political risk has become a top-level variable in the crypto market that cannot be ignored. The path to future bull markets will be more tortuous.
Short-term Traders:
Low leverage, high flexibility: In the current high-volatility environment, prioritize BTC and ETH, adopt a range trading approach, closely monitor news, and focus primarily on Trump's tweets, White House announcements, and official responses from both the U.S. and China. The market will react very quickly and violently when news is released.
Medium to Long-term Investors:
Dollar-cost Averagers: For investors who are optimistic about the crypto market in the long term, this drop can be seen as a "golden pit." Consider starting to dollar-cost average near key support levels (such as BTC $102,000, ETH $3,700), widening the price gap, and avoid heavy investment all at once.
Holders: If your position is not heavy, you can hold patiently. If your position is heavier and the cost is high, consider reducing your position appropriately when it rebounds to resistance levels to lower risk and pressure.
Understanding Now
Review of Major Events of the Week
On October 13, Binance compensated $283 million to users affected by the USDE and other assets decoupling, with the "zero price" in spot trading being merely a display issue;
On October 13, the prediction market platform Kalshi partnered with Pyth Network to transmit its prediction market information to over 100 blockchains as the latest data provider;
On October 15, Federal Reserve Chairman Powell warned that the U.S. labor market shows further signs of distress, suggesting he may be ready to support another rate cut later this month;
On October 16, Eric Trump confirmed plans to launch a real estate tokenization project through World Liberty Financial, marking further application of crypto technology in the real estate sector;
On October 17, $710 million was liquidated across the network in the past 24 hours, with a total of 217,395 people liquidated, including $508 million in long positions and $202 million in short positions, with the largest single liquidation occurring on Hyperliquid - BTC-USD, valued at $20.4274 million;
On October 16, Coinbase launched the stablecoin payment platform Coinbase Business, enabling businesses to send and receive USDC. This will simplify vendor payment processes, eliminate chargeback issues, and provide seamless API integration to help businesses scale efficiently;
The U.S. Department of Justice completed the largest seizure in history: On October 14, the U.S. Department of Justice announced criminal charges against Chen Zhi, founder of the Cambodian Prince Group, and successfully seized 127,271 bitcoins (valued at approximately $15 billion) under his control, marking the largest judicial seizure of bitcoins globally. This action demonstrates the state's ability to control on-chain assets;
The U.S. government shutdown continues: As of October 16, the "shutdown" crisis of the U.S. government persists, leading to delays in the release of several key economic data, exacerbating macroeconomic uncertainty and further dampening market risk appetite, including for cryptocurrencies;
Safe-haven funds flow into gold: Driven by escalating trade frictions, concerns over bank credit risks, and the U.S. government shutdown, risk-averse sentiment has surged, with significant funds flowing into gold. Spot gold prices broke through $4,380 per ounce this week, continuously setting new historical highs.
Macroeconomics
On October 15, Powell indicated that the Federal Reserve may stop tapering in the coming months. He stated in a meeting that the Fed's long-standing plan is to cease actions when reserves are slightly above the level deemed adequate by the Fed;
On October 18, according to the Federal Reserve rate observer, the probability of a 25 basis point rate cut in October is 94.8%.
ETF
According to statistics, from October 13 to October 17, the net outflow from U.S. Bitcoin spot ETFs was $1.225 billion; as of October 17, GBTC (Grayscale) had a total outflow of $24.453 billion, currently holding $18.475 billion, while IBIT (BlackRock) currently holds $85.778 billion. The total market capitalization of U.S. Bitcoin spot ETFs is $144.748 billion.
The net outflow from U.S. Ethereum spot ETFs was $311.8 million.
Envisioning the Future
Upcoming Events
The 2025 Shanghai Blockchain International Week will open in October, with the "11th Global Blockchain Summit" hosted by Wanxiang Blockchain Lab as a core event on October 23;
Blockchain Life 2025 will be held in Dubai, UAE, from October 28 to 29, 2025;
Bitcoin MENA will take place at the Abu Dhabi National Exhibition Centre (ADNEC) from December 8 to 9;
Solana Breakpoint 2025 will be held in Abu Dhabi from December 11 to 13.
Project Progress
Ethereal will release the mainnet Alpha version on October 20;
HyperSwap tweeted "October 20," possibly hinting at a TGE on October 20;
Bluwhale AI (BLUAI) will conduct its TGE on October 21;
Meteora (MET) will conduct its TGE on October 23.
Important Events
The U.S. Treasury is seeking public comments on the implementation of the "GENIUS Act," with a deadline of October 20;
The U.S. Bureau of Labor Statistics will release the September CPI report on October 24 at 20:30 Beijing time.
Token Unlocks
LayerZero (ZERO) will unlock 25.32 million tokens on October 20, valued at approximately $43.7 million, accounting for 7.86% of the circulating supply;
KAITO (KAITO) will unlock 8.35 million tokens on October 20, valued at approximately $8.71 million, accounting for 3.06% of the circulating supply;
Scroll (SCR) will unlock 82.5 million tokens on October 22, valued at approximately $14.08 million, accounting for 43.42% of the circulating supply.
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