October 29th, 2025

The great decoupling: Bitcoin breaks from Nasdaq as macro forces reshape crypto

The global risk sentiment appears buoyed by positive signals in US-China trade diplomacy and tangible progress in artificial intelligence deployment across enterprise and consumer sectors. These developments have provided a psychological cushion for equity markets, which responded with record-breaking closes across all three major US indices. The S&P 500 edged up 0.2 per cent, the Dow Jones Industrial Average rose 0.3 per cent, and the Nasdaq Composite led the charge with a 0.8 per cent gain, driven largely by technology stocks that continue to benefit from AI-related earnings momentum and investor enthusiasm.

Beneath this surface calm lies a more complex reality. Consumer confidence, while technically beating consensus expectations at 93.4, has nonetheless slumped to its lowest level in six months. This subtle but significant detail suggests that household sentiment is fraying even as financial markets climb. The divergence between Wall Street and Main Street has rarely been more pronounced.

Meanwhile, the bond market tells its own story of caution. US Treasuries closed narrowly mixed on Tuesday, with the 10-year yield slipping 1.4 basis points to 3.983 per cent and the yield curve flattening, a classic signal of economic uncertainty. Investors appear to be pricing in a near-term rate cut but remain wary of the Federal Reserve’s longer-term inflation outlook and policy trajectory beyond 2025.

The US Dollar Index, which measures the greenback against a basket of six major currencies, slipped 0.1 per cent to close at 98.67. This modest decline reflects sustained risk appetite among global investors, but also growing anticipation ahead of the Federal Open Market Committee’s upcoming decision. With markets almost fully pricing in a 25-basis-point rate cut, the focus has shifted from the magnitude of the move to the tone of the accompanying statement and Chair Powell’s press conference. Any hint of a less dovish stance than expected could trigger a sharp reversal in risk assets.

Commodities, too, betray underlying stress. Spot gold fell 0.7 per cent to settle at US$3,951.56 per ounce, marking a three-week low. This retreat from safe-haven assets typically signals confidence in risk markets, but in this context, it may also reflect dollar strength expectations or portfolio rebalancing ahead of the Fed.

More telling is the slide in oil prices. Brent crude tumbled 2.0 per cent to US$64.40 per barrel, pressured by persistent concerns over global demand and mounting evidence of oversupply. Weakness in crude often foreshadows broader economic softness, especially when it coincides with flattening yield curves and declining consumer sentiment.

Turning to crypto, the market declined 1.55 per cent over the past 24 hours, a move driven less by idiosyncratic factors and more by macro crosscurrents. Traders, wary of potential volatility around the Fed decision, shifted capital into stablecoins, a classic risk-off manoeuver in digital asset markets.

This flight to safety drained liquidity from spot and derivatives markets alike, exacerbating price sensitivity. The result was a cascade of forced liquidations, totalling US$552 million in just one day. Of that, US$122 million came from long positions in Ethereum, underscoring the fragility of leveraged bets in altcoins during periods of macro uncertainty.

This derivatives shakeout reveals a critical vulnerability in the current market structure. Perpetual futures funding rates plunged by 76 per cent, indicating a rapid unwinding of bullish leverage. When funding turns deeply negative or collapses in magnitude, it often signals that speculative longs have been flushed out, leaving the market in a more balanced but also more fragile state.

Ethereum’s 3.8 per cent underperformance relative to Bitcoin during this episode highlights a recurring theme. In times of stress, capital rotates toward the perceived safety of BTC, while altcoins bear the brunt of deleveraging.

Technically, Bitcoin’s rejection at the US$116,000 level proved decisive. The failure to sustain a breakout above this psychological and structural resistance triggered a cascade of stop-loss orders and algorithmic selling, which spilled over into the broader altcoin complex. The asset subsequently lost the US$114,200 support zone, breaking a key bullish trendline that had held since early October.

The total crypto market capitalisation now hovers near US$3.94 trillion, which aligns with the 50-day simple moving average, a critical inflection point. The Relative Strength Index at 52.66 suggests neutral momentum, neither oversold nor overbought, leaving the path of least resistance unclear.

What makes this juncture particularly delicate is the shifting correlation between crypto and traditional equities. Historically, Bitcoin and the Nasdaq have moved in tandem, especially during risk-on regimes. But recent data shows that correlation has flipped to negative 0.53, signaling a rare decoupling. This divergence suggests that crypto is no longer simply riding the coattails of tech stocks but is instead responding to its own set of macro and micro drivers, most notably Fed policy expectations, on-chain liquidity dynamics, and derivatives positioning.

From a strategic standpoint, the next 48 hours will be pivotal. The Federal Reserve’s communication today will likely set the tone for asset allocation decisions across all markets. A dovish cut accompanied by clear forward guidance could reignite risk appetite and catalyse a buy the dip rally in crypto, especially if liquidity returns from stablecoins to volatile assets.

Conversely, a hawkish tilt, perhaps emphasising sticky inflation or a higher-for-longer rate path, could trigger another leg down in crypto, with Bitcoin testing the US$112,000 support level and Ethereum struggling to hold above US$3,950.

For long-term participants, this volatility may represent opportunity rather than threat. The current flush of leverage creates a cleaner market structure, reducing the risk of cascading liquidations in the near term. Moreover, the macro backdrop still contains supportive elements, including AI-driven productivity gains, improving US-China relations, and a Fed that remains inclined toward easing, albeit cautiously.

The question is not whether these tailwinds exist, but whether they can overcome the immediate headwinds of policy uncertainty and technical fragility.

The market stands at a crossroads. The data paints a picture of cautious optimism tempered by real economic anxieties. Crypto, once again, finds itself caught between its aspirational narrative as a new asset class and its practical reality as a highly sensitive barometer of liquidity and risk sentiment.

The resolution of this tension will depend less on technical levels or liquidation metrics and more on the Federal Reserve’s ability to navigate the narrow path between inflation control and growth preservation. Until then, expect volatility, watch price action at key supports, and prepare for either a relief rally or a deeper correction. Both remain plausible in this finely balanced macro environment.

Source: https://e27.co/the-great-decoupling-bitcoin-breaks-from-nasdaq-as-macro-forces-reshape-crypto-20251029/

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

October 27th, 2025

S&P 500 eyes 7000, gold at US$4113, Bitcoin breaks US$115K: Here’s what’s driving the surge

The S&P 500, currently trading in the high 6700s as of late October 2025, hovers just below the psychologically significant 7000 threshold. A credible and durable US-China trade agreement could propel the index toward that level by year-end, a move representing a 2.8 per cent upside from current levels.

Such optimism remains contingent on tangible outcomes rather than mere rhetoric. The market’s advance hinges not only on macro diplomacy but also on the micro-level performance of 177 companies reporting earnings this week. Only consistent beat-and-raise guidance, where firms exceed earnings expectations and raise forward-looking forecasts, will sustain the fragile momentum. Without such confirmation, the rally risks unravelling under the weight of its own narrow breadth and elevated leverage.

Gold continues to serve as a strategic hedge amid rising macro uncertainty. Technical analysis points to structured accumulation zones at 3700 dollars and 3500 dollars, levels that have repeatedly attracted institutional and algorithmic buying. Despite an environment of loose monetary conditions and accelerating inflation expectations, correlated at plus 28 per cent with M2 money supply growth, portfolio allocations to gold remain strikingly low.

Only 2.4 per cent of fund managers hold more than five per cent of their assets in gold, suggesting significant room for reallocation if inflation proves persistent or if geopolitical tensions escalate. The metal’s recent consolidation near US$4113 per ounce reflects this tension between fundamental tailwinds and tepid institutional demand, a divergence that often precedes sharp re-pricing.

China’s evolving economic strategy adds another layer of complexity. The 15th Five-Year Plan for 2026 to 2030 formally pivots away from the old growth model centred on property and infrastructure toward human capital development and domestic consumption. This shift is more than semantic. The term consumption appears four times in the latest Communist Party Plenum Communiqué, compared to just once in 2020, signalling a deliberate policy recalibration.

Property, once the engine of Chinese growth, remains under regulatory scrutiny and is unlikely to receive meaningful stimulus, especially as exports continue to outperform. Instead, Beijing prioritises technological self-reliance and innovation, aiming for a sustainable 4.5 per cent annual growth rate through productivity gains rather than debt-fuelled asset bubbles. For global investors, this transition implies that Chinese equities may offer value but with heightened volatility tied to policy execution and external trade dynamics.

The US equity market, in contrast, has become increasingly concentrated. Performance is now effectively a binary bet on the success of artificial intelligence monetization within the MAG7 cohort, those mega-cap tech firms generating multi-billion-dollar free cash flows. Public AI plays appear safer than their private counterparts, like OpenAI or Anthropic, which remain unprofitable and lack a clear killer app to justify their valuations.

Even among public firms, the path to AI-driven revenue remains elusive. This narrow leadership amplifies systemic risk, particularly as leveraged ETFs magnify both upside and downside moves. A barbell strategy, pairing large-cap growth exposure with high-dividend yield stocks, remains prudent, especially when considering Japan’s continued commitment to Abenomics 3.0 under Prime Minister Takaichi, which supports regional diversification.

This week’s volatility triggers are unusually dense. Beyond the FOMC decision and Big Tech earnings, markets must navigate Donald Trump’s visit to Asia, Jensen Huang’s keynote at a major AI conference, and most critically, the Trump-Xi bilateral meeting on October 30 during the APEC summit in South Korea. Early signals suggest progress.

Chinese officials report a preliminary consensus on export controls, fentanyl trafficking, and maritime levies. These incremental steps have already fuelled a cross-asset rally, with Asian equities up 1.5 per cent and US index futures pricing in a 0.6 per cent gap-up at the open. Copper and Brent crude have surged on improved global growth expectations, while the US Dollar Index holds steady at 98.95, reflecting balanced risk sentiment.

The crypto market has surged in tandem, rising 3.62 per cent in 24 hours and 5.91 per cent over the week. This move stems from three reinforcing narratives. First, macro liquidity expectations have intensified as US bank reserves at the Federal Reserve declined to 2.93 trillion dollars, the lowest level since early January, and what analysts like Adam Livingston describe as nearing a danger zone. Historically, such reserve contractions in 2019, 2020, and 2023 preceded Fed interventions and sharp Bitcoin rallies. Markets now price in a 96.7 per cent probability of a 25-basis-point rate cut at the October 28 to 29 FOMC meeting, reinforcing the liquidity pivot thesis.

Second, institutional demand is accelerating. South Korea’s Bitplanet has initiated daily Bitcoin purchases targeting 10,000 BTC, following Metaplanet’s earlier treasury move of 25,555 BTC. Simultaneously, US spot Bitcoin ETFs recorded over 600 million dollars in net inflows last week, drawing approximately 62,000 BTC from exchange cold storage and tightening supply dynamics. This absorption of available supply reduces float and increases scarcity, particularly as Bitcoin dominance dips slightly to 58.84 per cent, indicating capital rotation into altcoins like Ethereum, which gained six per cent against BTC.

Third, technical momentum has ignited a leverage reset. Bitcoin’s breakout above 115,000 dollars, a level confirmed by multiple sources, triggered 350 million dollars in short liquidations, forcing leveraged bears to cover positions rapidly. Open interest in derivatives markets has climbed 6.95 per cent to 903 billion dollars, reflecting renewed speculative activity. However, funding rates have spiked by 105 per cent in 24 hours, and the RSI sits at a neutral 47.49, suggesting the rally may pause for consolidation rather than accelerate further immediately.

In summary, today’s market environment reflects a delicate balance between hope and reality. Macro optimism, fueled by potential US-China détente and anticipated Fed easing, has aligned with institutional crypto accumulation and technical breakouts to drive risk assets higher. The sustainability of this move depends on concrete outcomes: a credible trade deal, consistent earnings beats, and actual monetary policy accommodation.

If the Fed under-delivers or corporate guidance falters, the leveraged nature of current positioning could trigger a sharp reversal. Investors should monitor Bitcoin’s 113,500 dollar support and Ethereum’s 4,000 dollar level as near-term barometers of sentiment. The week ahead will not merely test market resilience. It will define the narrative for the final quarter of 2025.

Source: https://e27.co/sp-500-eyes-7000-gold-at-us4113-bitcoin-breaks-us115k-heres-whats-driving-the-surge-20251027/

Anndy Lian

www.anndy.com

j j j

October 1st, 2025

Diverging signals: Dow rises, gold breaks records, and crypto faces derivatives squeeze

As the United States inches closer to a federal government shutdown, with no resolution in sight after talks between congressional leaders and President Donald Trump ended without progress on Monday, investors are navigating a complex web of signals.

Wall Street stays resilient amid shutdown fears

Despite the looming administrative paralysis, Wall Street closed higher on Tuesday, extending its winning streak into a second consecutive quarter. The Dow Jones Industrial Average rose 0.2 per cent, the S&P 500 gained 0.4 per cent, and the Nasdaq added 0.3 per cent.

This resilience suggests that market participants either believe the shutdown will be short-lived or have already priced in its limited economic impact, given that past shutdowns have rarely derailed broader market trends for long.

Treasury yields and gold signal investor anxiety

Beneath the surface, subtle shifts in asset prices reveal deeper unease. US Treasury yields moved in opposite directions, reflecting a classic flight-to-quality dynamic mixed with short-term policy uncertainty. The 10-year yield inched up by one basis point to 4.148 per cent, while the 2-year yield fell by two basis points to 3.612 per cent.

This flattening of the yield curve often signals that investors expect near-term economic disruptions, such as a government shutdown, to weigh on growth, even if longer-term inflation or fiscal concerns remain elevated. Meanwhile, the US Dollar Index declined 0.1 per cent to 97.8, indicating a modest retreat in safe-haven demand for the greenback.

In contrast, gold surged 0.6 per cent to a record high of US$3,858.18 per ounce, underscoring its enduring role as a hedge against political and institutional instability. The precious metal’s ascent to unprecedented levels speaks volumes about the depth of investor anxiety, even as equities hold firm.

Oil and Asian markets reflect fragile demand

Commodities tell a different story. Brent crude oil dropped 1.4 per cent to US$67 per barrel, pressured by expectations that OPEC+ may accelerate its planned output increases in the coming months. This potential supply boost comes at a time when global demand outlooks remain fragile, particularly with China, the world’s largest oil importer, entering its week-long National Day holiday.

Asian equities reflected this caution, trading mixed on Tuesday and lower in early sessions on Wednesday, with mainland China and Hong Kong markets shuttered for the festivities. The absence of Chinese participation in regional trading has amplified volatility and reduced liquidity, leaving other markets more exposed to external shocks, including developments in Washington and shifts in US monetary policy expectations.

Crypto faces a risk-off correction

The crypto market declined 0.51 per cent over the past 24 hours, aligning with the broader theme of risk-off behaviour and profit-taking following recent rallies. Two distinct forces are shaping this correction: regulatory evolution and the dynamics of the derivatives market.

On the regulatory front, the Securities and Exchange Commission (SEC) issued new guidance allowing state-chartered trust companies, such as those operated by Coinbase, to act as custodians for investment advisers managing crypto assets.

At first glance, this appears to be a significant step toward institutional legitimacy. Long-term, it could pave the way for greater participation from traditional finance players who have long cited custody as a primary barrier to entry.

However, the guidance comes with stringent requirements, including mandatory annual audits and strict asset segregation protocols. These conditions have sparked operational concerns among crypto firms, many of which now face the prospect of higher compliance costs and structural overhauls.

As a result, the short-term market reaction has been one of caution rather than celebration. The progress is real, but the path to implementation remains uncertain, and the industry is watching closely for follow-up rule-making and clarity on adoption timelines from major platforms.

Simultaneously, the derivatives market is flashing warning signs. Perpetual futures open interest, a key gauge of leveraged positioning, fell by 5.48 per cent even as trading volume surged by 16.78 per cent. This divergence suggests that traders are actively unwinding leveraged long positions rather than initiating new ones. Compounding the pressure, average funding rates spiked to 0.0068, a staggering 354 per cent increase over 24 hours.

In perpetual futures markets, funding rates represent the cost of maintaining leveraged positions; when they turn sharply positive, it often indicates excessive bullish sentiment that becomes unsustainable. The recent surge suggests that longs were willing to pay a premium to stay in the market, creating a fragile equilibrium that ultimately collapsed under the weight of profit-taking and margin calls.

Notably, US$50 million in liquidations hit the XPL token alone, highlighting how concentrated leverage in smaller altcoins can amplify broader market selloffs. Historically, such spikes in funding rates precede heightened volatility, and if rates turn persistently negative, it could signal a deeper bearish shift as shorts dominate the market.

The current dip in crypto prices thus reflects a tug-of-war between structural progress and cyclical risk reduction. On one side, regulatory clarity around custody could eventually unlock billions in institutional capital, particularly if traditional asset managers gain confidence in secure, compliant infrastructure.

On the other hand, traders are aggressively trimming exposure in anticipation of near-term headwinds not just from potential SEC enforcement actions but also from macro crosscurrents like the US government shutdown and shifting Treasury dynamics.

This tension is further exacerbated by outflows from crypto ETFs, which have seen US$418 million exit Bitcoin funds and US$248 million leave Ethereum products recently. These outflows suggest that even regulated vehicles are not immune to sentiment swings, and that spot market demand may be insufficient to absorb the selling pressure from leveraged traders and cautious institutions alike.

The weeks ahead

Looking ahead, the critical support level for Bitcoin sits at US$113,000. A decisive break below this threshold could trigger further technical selling, especially if derivatives markets remain unstable.

Conversely, holding above this level might attract bargain hunters, particularly if the SEC’s custody framework begins to translate into tangible institutional inflows. Altcoins like Aster and Hyperbot face additional challenges due to supply-side constraints, which could either cushion their downside or exacerbate volatility depending on market liquidity.

Ultimately, the next few weeks will test whether the cryptocurrency market can decouple from macroeconomic noise and regulatory ambiguity, or whether it remains tethered to the same risk calculus that governs traditional assets. For now, prudence prevails, and the record highs in gold alongside muted equity gains suggest that even in a world of rising asset prices, uncertainty remains the dominant currency.

Source: https://e27.co/diverging-signals-dow-rises-gold-breaks-records-and-crypto-faces-derivatives-squeeze-20251001/