Two weeks on from the largest liquidation in crypto history, the market is still searching for its footing. Leverage has been flushed, but conviction hasn’t yet refilled the void. The message is unmistakable: participation is thin, positioning is defensive, and patience has become the only trade that pays.
The chaos of early October has faded, leaving a market waiting for clarity, uneasy, but quietly rebuilding beneath the surface.
Markets are flying half-blind as the U.S. government shutdown freezes most economic releases, leaving today’s CPI as the only hard data before the next Fed meeting. Headline CPI is expected to rise 0.4% MoM and 3.1% YoY. Meanwhile core CPI, excluding food and energy, is projected to increase 0.3% on the month and 3.1% year-on-year, unchanged from August.
Inflation remains uncomfortably sticky, still high enough to keep the Fed wary, yet soft enough to validate its cautious easing bias. With a 99% probability of a 25 bp cut next week now priced in, the real question is what comes next — particularly with the data blackout clouding visibility. Today’s CPI release will therefore take on outsized importance, likely setting the tone for both risk sentiment and rate expectations heading into the weekend.
Elsewhere, trade tensions remain in focus, though the tone has softened. Last week, Trump admitted his proposed 100% tariff on Chinese imports was “not sustainable” and confirmed plans to meet President Xi in South Korea next week, a familiar pattern of escalation and negotiation. Still, markets are treating it cautiously, wary of further headline shocks as fiscal, foreign, and energy policies increasingly collide – a reminder that geopolitics, not just macro, is driving the sentiment.
Crypto continues to mirror the broader macro mood, heavy, hesitant, and waiting for direction. Two weeks after the October 10 cascade, leverage has been flushed out and rebuilding remains slow. BTC has held broadly stable near the USD 110,000 zone (+3% on the week), while ETH trades just below USD 4,000 (+1.7% on the week), as liquidity and confidence take time to return.
ETF flows reflected that caution: BTC saw +USD 355.7m of inflows this week versus -USD 150.3m for ETH. BTC’s steady bid reinforces its role as the institutional macro hedge, while ETH continues to lag despite ongoing DAT accumulation.
Funding also remains constrained in the aftermath of October 10, a sign that leverage has yet to rebuild and speculative positioning remains light. In options, demand for downside protection persists in BTC and ETH, with skews still leaning toward puts. That said, implied vols have eased modestly into CPI.
The market feels heavy, yes, but structurally healthier. Leverage has reset, positioning is cleaner, and the forced sellers are gone.
Today’s CPI will define the tone into month-end. A softer print would reinforce the soft-landing narrative and likely spark a relief bid across risk. A firmer number would validate the cautious stance in Fed pricing and keep liquidity conditions tight.
Beyond CPI, the FOMC and the Trump–Xi summit on 30 October remains the next major catalyst. A credible step toward easing tariffs could lift sentiment quickly; renewed brinkmanship could deepen the defensive tone.
For now, crypto drifts in a narrow range – directionless, yet quietly charged.
In short: leverage has been flushed, liquidity’s in flux, and conviction’s still waiting its cue. Crypto isn’t roaring, but it’s holding firm – afloat and poised for its next move. As we’ve noted in previous Market Deep Dives, real momentum won’t return until macro clarity does — and that remains the missing piece.
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