Bitcoin Weekly Market Review | Expectations of Policy Easing + Strong Corporate Earnings, Crypto Market Slowly Pumps

Period: October 20-26

Macroeconomic Background: Expectations for Federal Reserve Rate Cuts Rise, Risk Assets Rebound Collectively

The U.S. September CPI came in at 3%, lower than the market expectation of 3.1%. Powell hinted that quantitative tightening ( QT ) may end in Q4, which sent a strong signal to the market for interest rate cuts. Coupled with a strong performance in the U.S. earnings season (87% of reported companies in the S&P 500 exceeded expectations), and easing trade tensions, the entire class of risk assets is rebounding.

U.S. stocks directly hit new historical highs: S&P 500 up 1.92%, Nasdaq up 2.31%, Russell 2000 up 2.50%, and the VIX index dropped to 16, indicating a significant improvement in market sentiment.

Bitcoin: Up 5.43% but the pace is slow

BTC is oscillating in the range of 106.6k-114.5k, with a weekly increase of 5.43%. Although it follows the rebound of global risk assets, there is one crucial detail:

The entry is not as fierce as in the US stock market — The spot BTC ETF has only seen an inflow of 446 million USD, with net outflows in the previous two weeks. This indicates that institutions' cautious attitude towards cryptocurrency has not yet completely reversed.

On-chain data: Retail investors gradually positioning at low levels

• Two strong support zones have formed: 107.3k-108.5k and 109.8k-111.1k, accumulating significant large order buying pressure.
• 91% of BTC is now profitable (last week it was 85%), which means selling pressure is decreasing.
• Long-term holders are reducing their positions less at low levels, showing stronger willingness to hold.

Derivatives: Options Activity Hits Record, Futures Leverage Declines

An interesting comparison has emerged:

• The open interest of options reached a historical high of 571.4k contracts, with investors actively leveraging bets on volatility.
• Open interest and leverage are decreasing — After this major liquidation, aggressive bulls have clearly decreased.

The overall logic is: defensive investors use options for hedging, while aggressive traders remain temporarily inactive.

Market Structure: Price Increase with Volume Decrease

This is the most alarming signal:

• The total market capitalization of the cryptocurrency market reached $3.84 trillion (weekly increase of 4.37%)
• However, the trading volume fell by 25.3% to 1.09 trillion.
• The trading volume of altcoins has dropped by 26.86%, with funds flowing towards the top coins.

Typical “weak upward movement” characteristic.

What to watch next week

Mt. Gox repayment critical point on the 31st (34,689 BTC waiting for distribution), Federal Reserve decision and Powell's speech, tech giants earnings season — all of these could trigger volatility.

BTC needs more incremental funds to break through the resistance at 114k. Currently, the policy environment is favorable, but the market is still observing, which is a typical “shoe hasn't dropped” state.