Crypto market review and hot spot analysis in October

# TL, DR

In October 2025, the United States entered a monetary easing cycle. The Federal Reserve cut interest rates and suspended balance sheet reduction, yet economic recovery remained weak. High inflation, a sluggish job market, low consumer confidence, and intertwined government and external risks collectively weighed on growth. Although inflation has declined somewhat, it still remains above the target. Weak employment and fiscal constraints have undermined the short-term driving effect of easing policies on consumption and investment. Overall, the U.S. is in the early stage of the easing cycle, with an improved policy environment; however, uncertainties surrounding inflation, employment, and external risks continue to exert pressure on economic recovery.

In October, the crypto market experienced severe volatility. During the "October 11" crash, trading volume soared to $428.2 billion, hitting a monthly peak. After that, trading activity turned lackluster, with weak capital flows and declining risk appetite. The total market capitalization edged down by 0.57% month-on-month, and the market fluctuated after a sharp pullback, characterized by cautious sentiment and insufficient incremental capital. Newly launched tokens were mainly focused on infrastructure, DeFi, and AI projects. Chinese meme coins gained short-term popularity but lacked sustainability.

In October, spot ETFs for Bitcoin and Ethereum recorded net inflows of $5.55 billion and $1.01 billion respectively. Market confidence recovered slightly after the black swan event, but overall sentiment remained cautious. The total circulation of stablecoins increased by $9.38 billion, with USDT and USDC being the main sources of growth. In contrast, the circulation of USDE plummeted by 31.1% due to its depegging incident.

Bitcoin’s short-term momentum weakened, and its price failed to stabilize above the 50-day SMA. Currently, it is fluctuating around the 20-day EMA. If it breaks below the $107,000 support level, it may accelerate its decline to $100,000, while $118,000 above serves as a key resistance level. Ethereum remained generally weak, with its price falling below the 50-day SMA. If it breaks below the descending triangle support, it may further drop to $3,350; if it rebounds above the 50-day SMA, bulls are expected to drive a rally, though resistance above remains strong. Solana saw a obvious tug-of-war between bulls and bears, failing to stabilize above the 20-day EMA. If it breaks through and stabilizes above this level, it is expected to rise to the channel resistance line; if it falls below $190, bears will gain the upper hand, potentially dragging the price down to $177 or even testing the lower edge of the channel.

In October, the crypto market witnessed the largest liquidation in its history. Bitcoin, Ethereum, and altcoins plummeted due to Trump’s tariff policy and the USDE depegging incident, with the total liquidation amount across the market hitting a new high of $19.1 billion, indicating the exposure of systemic leverage risks. Chinese meme coins gained rapid popularity on Binance as well as in the Solana and Base ecosystems. Projects such as "Binance Life" saw a skyrocketing market capitalization in the short term and attracted a large number of new traders, becoming a phenomenal hot topic. The launch of the x402 protocol attracted market attention, and the prices of related projects surged briefly before pulling back, reflecting the concentrated popularity and severe volatility of innovative concepts.

The market is expected to continue accelerating its expansion next month. Projects such as Polymarket, Kalshi, and Truth Predict will drive up industry liquidity and attention, while the layout of capital and public chain ecosystems will also speed up simultaneously. Although the crypto market suffered structural damage after the October 11 black swan event, expectations of eased trade tensions and favorable policies will provide support for the return of short-term risky assets. Going forward, focus should be placed on the performance of new prediction market projects, progress in China-U.S. trade, changes in the U.S. dollar and liquidity environment, as well as leverage risks in the crypto market.

## 1. Macro Perspective

In October 2025, the U.S. economy entered an easing cycle, but the momentum for recovery remained weak. The Federal Reserve cut interest rates consecutively and announced the suspension of balance sheet reduction, shifting its policy focus from curbing inflation to stabilizing growth and preserving employment, which reflects concerns about economic slowdown. Inflation remained relatively high, while the job market stayed sluggish, consumer confidence declined, and government shutdown and external risks intertwined, leaving the economy in a state where "policies have been eased, yet growth has not gained momentum". On the whole, the U.S. is in the early stage of a cycle inflection point, with an improved policy environment, but macroeconomic recovery still requires time.

### Policy Shift

In October, the Federal Reserve cut interest rates by another 25 basis points, lowering the federal funds rate to the range of 3.75%–4.00%, and announced the suspension of balance sheet reduction to release liquidity and strengthen the effect of easing. This marks a comprehensive shift of monetary policy toward a growth-oriented approach. The current decision-making logic emphasizes prioritizing stable growth; the Federal Reserve believes that inflation risks are relatively manageable, while the deterioration of employment and fiscal uncertainties are more pressing challenges. The market expects a further interest rate cut within the year, but policy transmission will take time, and it will be difficult to quickly stimulate consumption and corporate investment in the short term.

### Inflation Remains Above Target

In September, the CPI rose by 3.0% year-on-year, and the core CPI also stood at 3.0%. Although this was lower than expected, it still exceeded the Federal Reserve’s 2% target. The prices of food, housing, and services continued to rise steadily, indicating that endogenous inflation has not yet fully dissipated. In his statement, Powell emphasized that although inflation tends to moderate, the policy cannot let its guard down too early. If the decline in inflation slows down, the Federal Reserve may delay further easing measures. Inflation is under control in the short term, but the target range has not yet been achieved.

### Job Market Further Weakens

The rapid cooling of the labor market has become the core trigger for this round of easing. Due to the U.S. government shutdown, the Bureau of Labor Statistics suspended the release of September nonfarm payroll data, leaving the market without key reference. The latest available data for August showed that employment growth slowed significantly, with only 22,000 new jobs added. At the same time, the June data was revised downward to show negative growth. The weak labor market is undermining the supporting role of consumption and the service industry, and exacerbating the deterioration of household income expectations. The market generally worries that if employment continues to deteriorate, the economy will fall into a deeper growth slump, forcing the Federal Reserve to adopt more aggressive easing measures.

### Political, Fiscal, and External Risks Persist

The U.S. government has shut down due to the failure to pass the budget, with some departments suspending salary payments and operations, which has weakened fiscal expenditure and data transparency. Geopolitical frictions persist, including tensions in the Middle East and technological conflicts between the U.S. and China, all of which have increased risk premiums. Fiscal and external uncertainties have weakened the marginal effectiveness of monetary easing, resulting in a more delayed pace of market recovery. Although easing provides short-term support, the policy transmission channel is blocked, and the recovery of corporate confidence and long-term investment remains limited.

### Outlook

The U.S. is in the early stage of the easing cycle, with an improved policy environment but an unstable economic recovery. The key focuses in the future will be whether inflation can continue to decline, whether employment can stabilize, and whether easing policies can be effectively transmitted to consumption and investment. Fiscal deadlock, geopolitical risks, and market confidence remain the main uncertainties.

## 2. Crypto Market Overview

### Cryptocurrency Data Analysis

#### Trading Volume & Daily Growth Rate

According to CoinGecko data, as of October 27, the overall trading volume of the crypto market fluctuated significantly. During the "October 11" crash, market sentiment heated up sharply, and trading volume soared to $428.2 billion, a month-on-month increase of 106%, hitting a monthly peak. Capital was released in a concentrated manner in the short term amid panic and speculation. Beyond this period, overall market trading turned lackluster, with trading volume remaining in the range of $150 billion to $200 billion most of the time, indicating that investors’ risk appetite has declined and sentiment has turned cautious. Capital flows were slightly weak, and the market lacked sustained incremental capital inflows. In the short term, it will still require favorable macroeconomic and policy factors to drive a recovery in stronger upward momentum.

# Total Market Capitalization & Daily Growth Volume of the Entire Market

According to CoinGecko data, as of October 27, the total market capitalization of cryptocurrencies stood at $3.94 trillion, a 0.57% decrease compared to the previous month. From the start of October to October 9, the total cryptocurrency market capitalization rose slightly continuously, increasing from $3.96 trillion to $4.32 trillion, reflecting the gradual return of funds driven by phased positive factors. However, the market experienced a sudden downturn from October 10 to 11, with the daily market capitalization dropping by over 9%—the largest pullback in the entire month—indicating panic-driven capital outflows during the "October 11" market movement. Although the market rebounded briefly afterward, with the maximum recovery reaching approximately 5.7%, the overall rebound momentum was limited, and the market capitalization fluctuated within the range of $3.7 trillion to $3.9 trillion. On the whole, after undergoing a sharp adjustment, the market has stabilized, capital sentiment of waiting and watching has intensified, the willingness of incremental funds to enter the market is insufficient, and the market remains in a volatile phase.

# Popular Newly Launched Tokens in October

The popular tokens newly launched in October were mainly concentrated in the infrastructure, DeFi (Decentralized Finance), and AI (Artificial Intelligence) tracks, and most of them were still projects with VC (Venture Capital) backgrounds. Among these, projects such as Enso, Recall, Falcon Finance, YieldBasis, and ZEROBASE performed prominently, with relatively active trading volume after their launch. In addition, driven by the "Binance Life" effect and CZ’s (Changpeng Zhao, founder of Binance) promotion, the Chinese meme token sector heated up in the short term, and the launch of Binance Futures further fueled the enthusiasm for this sector.

### Key Term Explanations

- **DeFi (Decentralized Finance)**: A financial system built on blockchain technology that operates without traditional intermediaries (e.g., banks), enabling peer-to-peer financial services like lending, borrowing, and trading.

- **VC (Venture Capital) Background**: Refers to projects that have received investment from venture capital firms, usually indicating the project has obtained certain market recognition and resource support.

- **Meme Tokens**: A type of cryptocurrency whose value is primarily driven by community sentiment, cultural trends, and viral spread (similar to "meme stocks" in traditional markets), rather than just technical functionality or practical applications.

- **CZ (Changpeng Zhao)**: The founder of Binance, one of the world’s largest cryptocurrency exchanges. His public remarks or endorsements often have a significant impact on the market sentiment of related crypto assets.

3. On-chain data analysis

Analysis of inflows and outflows of BTC and ETH ETFs

BTC spot ETF saw a net inflow of US$5.55 billion in October

In October, Bitcoin spot ETF continued the trend of capital inflows, with monthly net inflows reaching US$5.55 billion, and total assets increasing to US$149.9 billion, a month-on-month increase of 3.8%. Bitcoin prices rose slightly to $110,070 from $108,936 at the end of September, a gain of 1%. After the crypto market experienced the black swan on October 11, market confidence has improved, but the overall change has not been much and it is still in a sluggish environment.

ETH spot ETF net inflow in October was US$1.01 billion

The Ethereum spot ETF recorded a net inflow of approximately US$1.01 billion in October, with total assets increasing to US$26.6 billion, a month-on-month increase of 3.9%. The price of ETH rose from $3839 to $3904, an increase of 1.69%.

# Analysis of Stablecoin Inflows and Outflows  

Total Circulating Supply of Stablecoins Surges by $9.38 Billion in October  

Although the overall stablecoin market remained in an inflow state and maintained growth in October, market confidence was severely hit by the "October 11" black swan event. In particular, USDE saw its circulating supply drop by nearly 31.1%—this was because its price decoupled during the black swan event, triggering market doubts about its algorithmic stablecoin mechanism. In other aspects, the total circulating supply of stablecoins increased by $9.38 billion, reaching $281.25 billion. USDT alone rose by $10.15 billion in the month, continuing to hold the top position. USDC (+$2.23 billion) also emerged as a major source of growth.  

### Key Term Explanations  

- **Stablecoin**: A type of cryptocurrency designed to maintain a stable value, typically pegged to a fiat currency (such as the U.S. dollar) or a commodity. Common examples include USDT, USDC, and USDE.  

- **Algorithmic Stablecoin**: A stablecoin that maintains its pegged value through algorithmic mechanisms (e.g., adjusting supply based on market demand) rather than relying on collateral like fiat currency or other assets. USDE falls into this category.  

- **Price Decoupling**: A situation where the market price of a stablecoin deviates significantly from its pegged value (e.g., a U.S. dollar-pegged stablecoin trading below $1), usually indicating issues with its stability mechanism or market confidence.

# 4. Price Analysis of Major Cryptocurrencies  

## BTC Price Change Analysis  

PREVIOUS：The Ethereum Foundation launches a new ESP fu NEXT：Li Jiachao: Hong Kong ranked first in the wor