Market update

After leveraged traders got their fingers badly burnt in the October 10 flash crash, sentiment remained risk averse over the past week. Concerns over regional bank loans hit US stocks and crypto, while queues round the block to buy gold in Australia suggest many are seeking a safe haven. President Trump’s 100% tariff threat on China remains a live option, but Trump now says he expects to reach a “fantastic deal” with Chinese President Xi Jinping when the two leaders meet later this month. Meanwhile, Australia is now America’s best friend, signing a A$13.5 billion (US$8.5 billion) agreement on rare earths and minerals, to shore up supply chains outside of China. US Fed chair Jerome Powell suggested its quantitative tightening program is nearing an end. Bitcoin finishes the week down 4.1% on seven days ago to trade around A$169,844 (US$110,683) while Ethereum is down 6.2% to trade around A$6,115 (US$3,986). Solana was down 8.5% this week, Cardano lost 9.2% and Dogecoin fell 6.7%. Chartist John Bollinger highlighted “Potential ‘W’ bottoms in Bollinger Band terms in ETH/USD and SOL/USD but not in BTC/USD. Gonna be time to pay attention soon I think.” The Crypto Fear and Greed Index is at 34, or Fear. 

Crypto just experienced one of the craziest weekends in its history, with cascading liquidations of leveraged positions worth A$29.3 billion (US$19.13 billion), according to CoinGlass. That’s an order of magnitude larger than the A$2.45B/US$1.6B in liquidations seen during the FTX collapse in 2022. Bitcoin plunged by around A$16k (US$10.4k) in a few hours (more on some venues) and Ethereum briefly dropped A$1,200 (US$780), but both were the standout safe performers in crypto, thanks to ample liquidity and dip buyers. Altcoins with thin liquidity lost 40%-80% and some, like ATOM, appeared to plunge by 99.5% briefly (although this may have been a display issue). Some market makers, who typically prop up trading, reportedly pulled out during the flash crash, exacerbating the problems. Traditional markets plunged too, after President Donald Trump responded to China’s rare earth export controls by threatening to resume the trade war with 100% tariffs – a threat he later appeared to walk back. Many perp traders were unhappy to discover that Auto Deleveraging can close out their positions without warning. Bitcoin finishes the week down 7.6% to trade around A$177,004 (US$115,252) while Ethereum was down 9.4% to trade around A$6,520 (US$4,245). Many other altcoins remain down by double digits, but the situation is improving, and the Crypto Fear and Greed Index has recovered from a low of 24 (Extreme Fear) on the weekend to 38 (Fear) now.

Despite the US government shutdown, Uptober has lived up to its name so far, with Bitcoin seeing its second-best start to the month ever, climbing to a new all-time high on October 5, and bettering it the following day by reaching A$189,637 (US$125,989).

Fabian Dori, Chief Investment Officer at  Sygnum Bank, believes the political dysfunction behind the shutdown actually encouraged investors to turn to BTC as a store of value as their faith in traditional institutions faltered. The shutdown also helped avoid one potential landmine, with the Bureau of Labor Statistics unable to release its September jobs report. Meanwhile, Jeff Bezos became the latest high-profile figure to worry publicly about an AI bubble, with one breathless report claiming the bubble was 17x larger than the Dotcom one.

Nobody outside of crypto appears to have paid much attention to Bitcoin’s new all-time high, with Google search interest for Bitcoin remaining low. This is arguably a good thing, as retail FOMO to new ATHs is often followed by a crash. Bitcoin finishes the week up 8.6% to trade around A$188,700 (US$124,847).

Ethereum is also within sight of a new all-time high, following a surge overnight after Grayscale announced staking for its Ether ETF. It finishes the week up 10.8% to trade around A$7,108 (US$4,702). Dogecoin and BNB also hit double-digit percentage increases. The Crypto Fear and Greed Index is at 71, or Greed.

The total crypto market cap plunged from A$6.15 trillion (US$4.03T) down to A$5.64T (US$3.7T) this week, before recovering over the past couple of days to A$5.98T (US$3.93T). There didn’t appear to be any one single catalyst, but concerns over interest rates, insider trading among DATS, plus President Trump’s latest 100% tariffs on pharmaceuticals and foreign films, as well as geopolitical instability, aren’t helping. The US government also looks headed for yet another shutdown, and given Trump presided over a 35-day shutdown back in 2018, the game of chicken could last for some time. US labour market figures come out this week, which could shake things up too.

The Ethereum ETFs lost A$1.21 billion (US$795.8M) to outflows, and the Bitcoin ETFs lost A$1.36 billion (US$897.6M). However, Bitcoin finishes the week up 1.5% on seven days ago to trade around A$173,813 (US$114,376), and Ethereum was up 0.9% to trade around A$6,416 (US$4,216). The Crypto Fear and Greed Index is at 50 or neutral. The good news is that Uptober averages a 21.89% return historically.

Despite a brief sugar rush from the US Federal Reserve cutting interest rates, crypto markets were wiped clean yesterday with the biggest flush of cascading liquidations in a year. A$2.6 billion (US$1.7 billion) of leveraged positions, mostly longs, were wiped out in 24 hours as Bitcoin and Ether corrected. Analysts suggest the Fed’s cautious approach to further cuts, US inflation fears and a weak jobs market contributed to a lack of confidence. Others believe history shows the four-year Bitcoin price cycle is due to end in October — but with a wave of new ETFs on the horizon and treasury companies still in acquisition mode, commentator Kaleo asked: “Does anyone truly believe this is a typical four-year cycle?” Economist Timothy Peterson pointed out last week that September 21 is historically Bitcoin’s single worst day of the year, after which it tends to finish higher 70% of the time, with a median gain of 50%. History is also promising for Ether, according to CoinGlass, which reports that ETH has historically delivered an average return of 23.85% in the fourth quarter. Bitcoin finishes the week down 2.1% to trade around A$170,684 (US$112,540) while Ethereum is down 6.9% to A$6,360 (US$4,195). Most of the other majors were down in a range between Cardano’s and Dogecoin’s 4.3% to 9.6% decline. The Crypto Fear and Greed Index is at 45, or Fear.

The Bitcoin bull market isn’t over, but it’s not looking as healthy as it could be, with eight of the ten indicators on the CryptoQuant Bull Score Index flashing bearish.  “Momentum is clearly cooling,” CryptoQuant analyst JA Maartun said. However, the Altcoin Season Index is at 78, with the metric climbing from 25 (Bitcoin season) in June. Expected interest rate cuts in the US could support crypto markets, with FundStrat’s Tom Lee telling CNBC that monetary policy combined with the usually strong fourth quarter means Bitcoin “can easily get to US$200,000 (A$299K) before the end of the year.” Bitcoin has traded up and down in an A$15K/US$10K range this week, and it finished up 3.5% from seven days ago to trade around A$172,939 (US$115,320). Ethereum finishes the week up 5.6% to trade around A$6,799 (US$4,535), Solana gained 10.5%, and Dogecoin surged 13.5%. The Bitcoin ETFs hauled in A$3.5B/US$2.32 billion while the Ethereum ETFs took in A$955M/US$637.6 million. The Crypto Fear and Greed Index is at 53, or Neutral.

If Donald Trump thought firing the Statistics Commissioner last month would result in improved numbers, he would have been disappointed, as only 22,000 US jobs were added in August, which was well below the 75,000 expected. Unemployment ticked up and wage growth slowed; however, that increased expectations of US interest rate cuts and the Nasdaq hit a fresh all-time high overnight. New US inflation figures come out mid-week. Ethereum flipped Bitcoin for spot market trading volume for the first time in seven years, but still finished the week flat at A$6,510 (US$4,297), while Bitcoin gained 3.9% to trade around A$169,420 (US$111,645). Analyst Ted Pillows believes ETH may be following Bitcoin’s 2020 price action when it pulled back 25% – 30% after it hit a new all-time high. If ETH mirrors that move, Pillows says it could bottom around US$3,500 to US$3,700 (A$5,305 to A$5,607) before a “parabolic rally in Q4”. Solana surged 7.7% as Forward Industry announced a US$1.6 billion (A$2.4B) SOL treasury. Ripple gained 6.9% and Dogecoin shot up 13.9%. Bitcoin mining difficultly also climbed to a new all-time high of 134.7 trillion on Friday. Stock and crypto trading platform Robinhood surged 15% after being added to the S&P 500, but Strategy was snubbed, despite qualifying for inclusion. The Crypto Fear and Greed Index is at 51, or Neutral.

After peaking at a new all-time high in August, Bitcoin has fallen 13% to touch its lowest level since June. It fell 0.2% this week and is currently trading around US$108,913. Over the past year, Bitcoin has suffered two one-third drawdowns, so further downsides are possible. Tech stocks are also suffering, with the Nasdaq pulling back 1.2%. Ethereum fell by 3.4% this week to trade around US$4,304, even as the Ethereum ETFs hauled in more than a billion dollars. ETH has now fully retraced the god candle it saw following Jerome Powell’s Jackson Hole speech. Zooming out, the picture is rosier, however, with analyst Ted Pillows pointing out that while Bitcoin is flat in the third quarter, Ethereum is up 77%. The week’s best performer was Solana, which briefly reclaimed the US$200 mark and finished the week up 3.22% amid a sea of red, perhaps in anticipation of ETF approvals. Looking ahead, September is typically a down month, but Uptober and November usually see some of the best returns of the year. The US M2 money supply has also just hit a new all-time high, with Bitcoin typically following it upwards after a lag. Strategy is also set to join the S&P 500 later this week. The Crypto Fear and Greed Index is at 49, or Fear. 

Crypto markets surged after US Federal Reserve chair Jerome Powell’s Jackson Hole speech, which renewed optimism for interest rate cuts ahead. The US stock market hit its highest valuation in history, surpassing the Dot-Com bubble and the lead-up to the Great Depression. While Solana, Dogecoin, and BNB jumped higher after the speech, all eyes were on Ethereum, which hit a new all-time high of A$7,641/ US$4,953 for the first time since 2021.

After an impressive run up to a new all-time high for Bitcoin of US$124,457/A$191,680, markets pulled back, causing much wailing on the weekend as some assumed it was all over. The US producer price index had come in hot at 3.3%, dampening expectations for an interest rate cut in September.  However, crypto’s fundamentals are looking healthy, with Bitcoin’s 200-day moving average now above the US$100K/A$154K mark for the first time, and BTC accounting for 1.7% of the global money supply. Bitcoin finishes the week down 1.5% to trade around US$116,956/A$180,439. Ethereum also got within 2% of a new all-time high (US$4878/A$7532) before buyers lost their nerve. It has held above the US$4100/A$6315 resistance it was under for four years, and the ETH supply on exchanges is down to just 12%.  Ethereum finishes the week up 3.8% to trade around US$4377/A$6754. Leveraged ETH shorts are also at an all-time high as many expect the price to fall. However, with billions flowing in from ETH treasury companies, the high leverage could lead to a short squeeze upwards if they’ve miscalculated. Other notable moves include Solana, up 6% for the week, and Cardano, up 20.8%. Searches for ‘altcoin’ have hit the highest level since 2021. The Crypto Fear and Greed Index is at 60, or Greed.

Bitcoin came within a whisker of breaking its all-time high in US$123,091 yesterday, with some Bitcoiners claiming it has already surpassed the ATH in AUD due to fluctuations in the exchange rate. Bitcoin finishes the week up 2.8% to trade at US$118,729. But all eyes are on Ethereum’s revenge arc back to 2021 prices after two years of bearishness and FUD. ETH is currently up 13.4% for the week to trade around US$4,216. Ethereum’s big move on the weekend led to much discussion of a rotation into altcoins, but with 20,000 new coins being created per day, not everything is set to benefit. Analyst Miles Deutscher is calling for a “mini alt season”; however, the CMC Altcoin Season index has been ranging between 29 and 43, so it’s not happening just yet. In potentially worrying macro news, more than 90% of fund managers surveyed by the Bank of America think US stocks are overvalued. There was a massive outflow from US crypto ETFs on Monday last week, but the Ether ETFs recovered to take US$327.6 million for the week, while the Bitcoin ETFs took US$253.2M. BlackRock dashed hopes for an imminent new altcoin ETF by saying, “At this time, BlackRock does not have any plans to file an XRP or SOL ETF.” The Crypto Fear and Greed Index is at 70, or Greed.

The “main character” driving crypto markets this cycle appears to be the President of the United States. Friday saw more than US$900 million (A$1.39B) in crypto liquidations as investors realised Donald Trump really is putting tariffs on the entire world. Trump also fired the political appointee who’d released bad jobs numbers and said he’d sent nuclear subs to intimidate Russia. These macro factors hit markets hard and outweighed the incredibly bullish news that the SEC is launching Project Crypto.

Despite bizarre fake reports that China has banned crypto again, markets staged a recovery over the past day or so, perhaps looking ahead to the possibility of three interest rate cuts that Goldman Sachs suggests will now happen this year. Ethereum led the comeback with a 6.5% gain overnight, but remains down 1.4% for the week. Bitcoin is down 2.2% for the week, trading around A$178,553 (US$115,166).

Ethereum was also the big winner in July, surging 56% to clock its highest monthly gain in three years. It’s currently trading at A$5,767 (US$3,720). The CoinDesk 20 Index rose 21% in July. Base has overtaken Solana (down 7.7%) on the number of tokens launched, thanks to minting Zora posts as ERC-20 tokens. Popular newspaper USA Today this week told its 5.1 million X followers, “XRP is the smartest cryptocurrency to buy with US$500 (A$772) now.” The Crypto Fear and Greed Index is at 64, or Greed.