In mid-October, the U.S. Department of Justice seized approximately 127,000 bitcoins (about $15 billion) from Chen Zhi, the founder of the Cambodian Prince Group, marking the largest seizure in history. The Federal Reserve has recently adopted a hawkish stance, with expectations for a rate cut in December falling below 50%. Inflation remains around 3%, and employment continues to show resilience. High interest rates, a strong dollar, and policy uncertainty continue to suppress risk assets, including the cryptocurrency market. At the same time, internal industry movements are also influencing market sentiment: the stock prices of large holding companies have declined, with some companies' market values falling below their net bitcoin holdings, reflecting a market reassessment of valuations.
Cryptocurrency Market Correction
In the past month, the cryptocurrency market has experienced a significant correction. Bitcoin has dropped to around $89,000, and Ethereum has dipped to $2,945, hitting a six-month low. The decline is primarily influenced by macroeconomic headwinds and regulatory events, leading to profit-taking by bulls. Technical indicators show that Bitcoin's RSI has fallen below 30, indicating a short-term oversold condition, with prices approaching support at the six-month moving average, and bearish momentum has not yet expanded. Analysts point out that if there are no new negative developments, mainstream coins are likely to find support at current levels and gradually recover.
On-chain Data and Capital Flows
On-chain data indicates a recent net outflow of stablecoin funds, reflecting a rise in risk-averse sentiment, but there has also been buying on dips at exchanges, suggesting that bottom-fishing forces are accumulating. Bitcoin holdings show a pattern of "large holders reducing positions, retail investors picking up," further dispersing the chips. The number of active addresses and on-chain transaction volume remain generally stable, while retail speculation enthusiasm is cooling. The total value locked (TVL) in DeFi has decreased by about 10%-15% from last month's peak, indicating pressure from capital withdrawals. The Ethereum staking rate has risen to about 30%, a historical high, showing strong long-term holding willingness, with no large-scale redemptions, reflecting investors' confidence in the ecosystem and yield mechanisms.
Derivatives and Options Market Dynamics
As spot prices decline, the volatility in the Bitcoin options market has rapidly increased, with DVOL once soaring above 50. The 25-delta skew indicates a strong bearish sentiment in the short term, with nearly 40% of trades involving buying put options, and open interest concentrated around a strike price of about $95,000, which may amplify short-term volatility. The overall implied volatility curve shows high near-term and low long-term, indicating that investors are cautious about recent risk events, but medium- to long-term expectations remain stable.
Mainstream Coins and Sector Performance
Amid market adjustments, various sectors and mainstream coins have shown divergent performances. The RWA (Real World Asset tokenization) sector, which has intrinsic yield and risk-averse attributes, has performed relatively well, such as tokenized U.S. Treasury bonds and on-chain bond funds, attracting risk-averse capital due to their linkage to real yields and low volatility. High Beta sectors like Layer 2 ecosystems and public chain tokens have been more impacted, but activity levels continue to grow. Solana (SOL) has performed well, with its price correction being smaller than the overall market, increased trading volume, and some funds showing net subscriptions, reflecting institutional and investor recognition of its network improvements and the value of high-performance public chains.
Matrixport Structured Product Strategy Recommendations
In a high-volatility, directionally uncertain market environment, investors are advised to flexibly use structured products to balance risk and return:
Accumulator products for phased buying: Suitable for investors who anticipate market consolidation and wish to gradually increase their positions.
Directional/Inverse range yield products (FCN): Suitable for obtaining stable yield income during range-bound markets and declining volatility.
Decumulator products for phased selling: Suitable for investors concerned about future market conditions and wishing to gradually reduce their positions on highs.
Daily dual-currency investment products: Short-term (1 day to 1 week), can lock in short-term returns and seek additional profits.
In the face of macro uncertainty, high volatility, and sector divergence, investors should maintain patience and discipline. On one hand, they should pay attention to policy and market risk events, controlling positions and leverage; on the other hand, they can optimize entry and exit strategies using diverse structured products based on their risk preferences. With professional allocation and risk management support, investors are expected to actively seize opportunities in a volatile market, laying the groundwork for the next phase of market trends.
Some of the views above are from Matrix on Target, Contact us_ for the complete report of Matrix on Target._
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 herein.
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