On October 22, the trading price of Bitcoin hovered around $107,000, while Ethereum fluctuated around $3,800, making the recent slight breakthroughs of $110,000 and $4,000 seem somewhat fleeting.
According to CoinGecko, the total market capitalization of cryptocurrencies worldwide fell by 0.4% overnight, to approximately $3.745 trillion. Overall market sentiment remains weak, with the Fear and Greed Index currently at 29, firmly in the "fear" zone.
Adding pressure to the market is the significant outflow of funds from U.S. spot crypto ETFs. According to statistics from Farside Investors, Bitcoin ETFs recorded net outflows for four consecutive trading days as of October 20, totaling over $1.2 billion, marking the second-largest weekly fund withdrawal since the product's launch in January 2024.
Among them, BlackRock's IBIT saw an outflow of $107 million yesterday, with a larger withdrawal of $268 million recorded last Friday. Fidelity's FBTC and ARK Invest's ARKB together saw outflows exceeding $450 million during the same period. In the same week, Fidelity's FBTC and ARK's ARKB had a combined outflow of over $589 million.
Meanwhile, data from RootData shows that last week, Ethereum ETFs experienced a total net outflow of $312 million. Among them, BlackRock's ETHA had a weekly outflow of $245 million, while Grayscale's ETHE saw about $101 million withdrawn.
However, ETFs returned to a net inflow state on Tuesday, with a total daily net inflow of $477.2 million.
Nick Ruck, head of LVRG Research, stated, "The return of net inflows yesterday indicates that institutional sentiment may be stabilizing after recent volatility, showing that investors' confidence in cryptocurrencies as a portfolio diversification tool is recovering amid economic uncertainty."
According to SoSoValue data, 9 out of 12 Bitcoin funds saw net inflows yesterday, led by BlackRock's IBIT with a net inflow of $210.9 million. ARK and 21Shares' ARKB had a net inflow of $162.8 million, while Fidelity's FBTC recorded a net inflow of $34.15 million.
The spot Ethereum ETF also recorded a net inflow yesterday, totaling $141.6 million, with Fidelity's FETH leading with an inflow of $59 million.
Ruck also pointed out that gold demand has peaked, prompting investors to seek alternative risk-adjusted opportunities like cryptocurrencies. On Tuesday, spot gold prices fell sharply by 5.9%, marking the largest single-day drop since 2020. Therefore, some analysts predict that Bitcoin may experience "aggressive catch-up trading."
In addition, macro headwinds are fueling the sell-off in cryptocurrency prices. Bloomberg reported yesterday that with inflation above target, the Bank of Japan (BOJ) is nearing its first interest rate hike in nearly two decades. This news triggered a chain reaction in global markets, strengthening the yen and sparking risk-averse sentiment in both the stock and cryptocurrency markets. Coupled with a strengthening dollar and tightening global liquidity, speculative assets like Bitcoin and Ethereum are facing multiple shocks.
The market is concerned about the arrival of synchronized tightening, as central banks, including the Federal Reserve (Fed) and the European Central Bank (ECB), have indicated they will continue to maintain a tightening policy into 2026.
Olaf Sleijpen, a member of the ECB's Governing Council, noted in a recent interview with Bloomberg that the current monetary policy stance is appropriate, but decision-makers must respond promptly if data or forecasts change. He stated that despite facing trade difficulties, the Eurozone economy is still "in quite good shape," with employment levels "close to full capacity."
Currently, most economists believe that the ECB has completed this round of interest rate cuts.
This Friday, the U.S. will release the Consumer Price Index (CPI) for September, marking the first official inflation report since the recent government shutdown, and the market is highly focused on how the data will impact financial markets, especially cryptocurrencies. During the U.S. government shutdown, the Bureau of Labor Statistics suspended the collection and release of all other data, with no employment reports, non-farm data, or producer price index releases, making the September CPI data the only reference for the Fed's decision on federal interest rates.
Analysts expect the September CPI year-on-year to rise from 2.9% in August to 3.1%, with core CPI remaining around 3.1%. If the data comes in below expectations, it may strengthen market expectations for the Fed to cut rates or pause rate hikes, which would be favorable for risk assets like Bitcoin and Ethereum; if it exceeds expectations, it could trigger concerns about rate hikes, putting short-term pressure on the crypto market.
Polymarket data shows that the current market bets a 96% probability that the Fed will cut rates by 25 basis points next.
The market is closely watching two major catalysts: the potential policy shift from the Bank of Japan and the Fed's statements on liquidity tightening this week. If market risk sentiment stabilizes, Bitcoin's short-term support level is expected to be around $106,000, while $110,000 remains a key resistance level that needs to be reclaimed.
Currently, ETF fund outflows, macro uncertainty, and aggressive short positions are collectively keeping the market in a defensive posture. However, long-term bulls view the current cooling period as a healthy adjustment after months of overheated speculation.
Related: When "light participation" becomes the traffic password: New growth logic for crypto platforms during the cooling cycle
Original: “The Crypto Market Under Multiple Headwinds: ETF Inflows and Inflation Data in Focus”
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