Executive Summary:
Last week (October 14th–October 18th), global financial markets experienced turmoil due to the ongoing China-US trade conflict and the emergence of credit risk within US regional banks. The US stock market stabilized thanks to better-than-expected earnings reports, but the crypto market failed to follow suit. Bitcoin (BTC) has fallen for two consecutive weeks, with market fear running high and a clear lack of rebound momentum. Caught in the awkward position between a “safe-haven asset” and a “high-risk asset,” BTC performed significantly weaker than traditional assets like US stocks and gold. On-chain data indicates that the $106k–$108k range is the critical short-term support, placing BTC at a pivotal point for potentially entering a medium-term correction. The short-term market trajectory still hinges on macro catalysts, including trade negotiation progress, the resumption of US economic data releases, and the upcoming FOMC meeting.
Macro Environment: Increased Risk Shocks, Rising Fed Dovish Expectations
The global macro environment last week centered around trade friction and credit risk.
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Trade Situation Fluctuations: On one hand, President Trump's remarks on October 14th about considering terminating business ties with China in areas like edible oils amplified market concerns; on the other hand, a video call between US and Chinese trade representatives on October 18th, agreeing to hold a new round of economic and trade consultations soon, temporarily eased tensions.
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Emergence of Credit Risk: On October 17th, two US regional banks, Zions and Western Alliance, disclosed loan fraud and bad debt issues, triggering widespread investor worry about credit quality, which particularly unsettled the stock market during the latter half of the week.
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Fed Signals Dovish Stance: Fed Chairman Powell stated on October 14th that the Federal Reserve might end the reduction of its balance sheet (QT) in the coming months, noting increased downside risks to employment. He added that the situation would become more complicated if the government shutdown delayed economic data releases. The Fed’s Beige Book also suggested that rising uncertainty might weigh on the economy. Funding conditions are strained due to massive US Treasury issuance, and the yield decline on shorter-term Treasury notes was steeper than on longer-term notes, suggesting the market is betting the Fed will act faster through rate cuts or halting QT to safeguard liquidity.
Market Performance: Crypto Decouples from US Stocks, BTC's Awkward Positioning
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US Stocks: Supported by Earnings Amidst Risk
The US stock market endured its most dramatic volatility since April but ultimately stabilized due to robust earnings results.
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Earnings Season as a Stabilizer: Financial giants like Morgan Stanley and Bank of America reported third-quarter results that widely exceeded expectations. According to FactSet, 86% of S&P 500 companies that have reported earnings have beaten market consensus, acting as a "stabilizer" for the US market.
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Price Movement: The market rebounded in the first half of the week, boosted by easing tariff conflicts and Powell’s rate cut signals; it then gave back some gains in the latter half due to concerns over regional bank credit issues.
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Crypto Market: Risk Appetite Plunges, BTC Weakness Evident
The crypto market largely followed a "drop-with-no-rebound" pattern, with significantly weaker rebound strength than US stocks, indicating a sharp cooling of risk appetite.
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Price Movement: BTC fell 5.49% for the week, closing at $108,642.7, with an intraday low of $103,500.
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Awkward Positioning: In relative terms, BTC fell 7.55% against the Nasdaq and 10.74% against gold. Lacking fundamental support like earnings, Bitcoin was neither viewed as a high-yield asset nor did it fulfill its "digital gold" safe-haven function, challenging its asset positioning in the current macro environment.
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Market Sentiment: The Fear & Greed Index dipped further into the "Extreme Fear" zone, with investors reacting more severely to negative news, particularly in high-risk assets like BTC.
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Market Style: Following the extreme volatility in altcoins, capital allocation is gradually shifting toward major coins, with Bitcoin’s trading share rebounding to 36%, consistent with the market tendency to favor BTC over altcoins when risk appetite decreases.
On-Chain Signals: Short-Term Support Strengthens, Selling Pressure Contained
On-chain data suggests the spot market retains resilience and is actively rebalancing to reinforce short-term support.
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Selling Pressure Analysis: The spot market shows a net selling bias, but the current selling pressure is less intense than in Q2 2024 and Q1 2025. This pressure is almost entirely concentrated on Binance and partially offset by buying on Coinbase, possibly indicating that US users are more inclined to accumulate during the dip than overseas users.
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Active Rebalancing: On-chain BTC transfer volume reached its highest level since December 2024, showing investors actively repositioning after the extreme market conditions.
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Support Level Reinforcement: Accumulation was concentrated in the $106k–$113.6k range, with 109k BTC accumulated in the $106k–$107k range, establishing it as a crucial short-term accumulation support.
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The $108k Key Level: Holders with a cost basis around $108.7k surprisingly accumulated, short-term reinforcing the $108k support level.
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Outlook: Volatility Expected to Rise Significantly, Focus on Macro Signals
BTC is currently at a critical junction regarding a potential medium-term correction, with the market awaiting new directional signals.
Short-term market catalysts include:
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Trade Negotiation Progress: Any sign of de-escalation is likely to briefly lift market sentiment.
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Resumption of US Economic Data: If the US government ends its shutdown and resumes economic data releases (e.g., the September CPI report on October 24th), it will re-establish a pricing anchor for the market and help assess the potential for further credit risk contagion.
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FOMC Meeting: The market broadly anticipates the upcoming FOMC meeting to deliver dovish signals.
Overall, the crypto market, lacking its own fundamental tailwinds, is expected to see a significant increase in volatility over the next two weeks. A recovery in market sentiment will require external macro signals.
Key Events This Week and Near Term (Oct. 20–Oct. 25)
| Date | Event | Impact/Focus |
| Oct. 20 | LayerZero (ZRO) unlocks approx. 25.71 million tokens; Ethereal launches Mainnet Alpha. | Token unlocks may increase selling pressure; attention on the new platform’s market performance. |
| Oct. 21 | The Fed hosts a payment innovation conference, covering stablecoins and tokenization. | Focus on the Fed's stance on crypto regulation and innovation. |
| Oct. 22 | 4th ETHShanghai Conference; Tesla Q3 Earnings Release. | Focus on key Ethereum development topics; monitor the impact of major corporate earnings on US stocks and risk asset sentiment. |
| Oct. 24 | US Bureau of Labor releases September CPI report; US October Markit Manufacturing PMI announced. | Crucial economic data that will influence Fed policy expectations and market pricing. |
| Oct. 25 | Plasma (XPL) unlocks approx. 88.89 million tokens. | Token unlocks may increase selling pressure. |
