Liquidity hopes steady crypto as growth caution lingers

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Introduction

Investor sentiment this week reflected a mix of optimism and caution. Expectations of imminent US rate cuts sent bond yields lower worldwide, offsetting worries about weaker growth and an extended US government shutdown. Asian data remained mixed, with China’s 4.8% GDP highlighting a soft patch and Japan announcing a ¥13.9 trillion stimulus package.

For digital assets, falling yields and firm liquidity expectations supported stability across major tokens. Markets are pricing in a possible Fed cut this month, a setup that favours liquidity-sensitive assets such as Bitcoin.

Check prices on the BTC Markets exchange.

State of crypto

• Bitcoin steadies near US$110K, drawing fresh confidence from US$370M in weekly ETF inflows
• Ethereum holds around US$3,820, as modest ETF outflows reflect cautious institutional positioning
• Solana stabilises near US$185, supported by steady network demand and ongoing ETF speculation
• XRP trades near US$2.39, showing tentative signs of recovery after October’s volatility
• Total market cap eases to US$3.64T, with Bitcoin dominance rising to 59.9% as altcoins consolidate

Bitcoin steadies near US$110K, drawing fresh confidence from US$370M in weekly ETF inflows

BTC traded within a tight range between US$106K and US$111K as markets steadied following last week’s record liquidations. While short-term momentum softened, institutional demand through ETFs continued to provide a solid floor. Data showed US$477M added in the past 24 hours, bringing cumulative inflows to US$26.7B this year.

Softer bond yields and expectations of a U.S. Federal Reserve rate cut helped anchor sentiment, suggesting investors are positioning through volatility rather than stepping aside. Public companies now hold more than one million BTC, worth around US$117B, underscoring the growing institutional footprint in digital assets.

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Ethereum holds around US$3,820, as modest ETF outflows reflect cautious institutional positioning

Following Bitcoin’s stability, ETH traded below near-term resistance as traders reassessed exposure after the recent liquidation cycle. Weekly ETF outflows of US$84M trimmed total inflows to US$11.9B, signalling selective engagement rather than broad accumulation. Even so, on-chain data remains supportive: exchange reserves are at a one-year low, and whale wallets continue to absorb supply through staking and ETFs. While conviction remains softer than Bitcoin’s, steady accumulation by larger holders suggests structural demand is still in play.

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Solana stabilises near US$185, supported by steady network demand and ongoing ETF speculation

Building on resilience across major assets, SOL traded between US$181-$185 following repeated rejections near US$190-$200. Though short-term indicators remain flat, the network’s ecosystem continues to expand, supported by developer activity and consistent transaction volumes. Ongoing speculation about a potential Solana ETF has kept sentiment constructive. Solana’s low fees and staking yield make it increasingly attractive to institutional investors.

Market watchers are also eyeing potential Solana ETF approvals in coming months as part of a broader wave of institutional product launches, including new ETP listings in the UK. Holding above the US$176 support zone remains crucial for maintaining its broader uptrend.

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XRP trades near US$2.39, showing tentative signs of recovery after October’s volatility

Meanwhile, XRP hovered near US$2.39 as markets continued to digest last month’s steep liquidations. The token remains below its near-term resistance at US$2.65, but early signs of bullish divergence hint at stabilising momentum. While ETF-related activity has been modest, a steadier backdrop and improving sentiment could help prevent deeper losses. Regulatory clarity and potential ETF developments remain in focus, as investors weigh whether XRP could follow the next wave of institutional products seen across Bitcoin and Solana.

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Total market cap eases to US$3.64T, with Bitcoin dominance rising to 59.9% as altcoins consolidate

Across the broader market, total crypto capitalisation declined from US$4.3T in early October to US$3.64T, with daily volumes steady near US$202B. Bitcoin’s rising dominance underscores a shift toward defensive positioning as investors favour stability over speculation. Within the top 20, TRON (TRX) and Hyperliquid (HYPE) showed relative resilience, while Avalanche (-12%), Sui (-10%), and Solana (-7.3%) led the week’s laggards.

The rotation toward Bitcoin highlights selective confidence rather than broad risk-taking, reflecting a market in cautious recovery mode. Japan’s recent approval of bank crypto custody further reinforces this trend, expanding institutional access to digital assets across Asia.

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Crypto Fear & Greed Index

Source: Fear & Greed Index

BTC Markets in the news

Bloomberg: Bitcoin Extends Slide as $600 Billion Erased Since Crypto Crash

“What’s striking is the timing of the crash coinciding with major players pursuing banking licenses,” said Rachael Lucas, analyst at BTC Markets. The pivot to traditional financial infrastructure “signals a strategic hedge against volatility, aiming to build legitimacy,” she added.

SMSF Adviser: SMSFs using crypto as long-term strategy: analyst

Rachael Lucas, analyst at Australian cryptocurrency exchange BTC Markets, says that crypto is no longer just for early adopters or tech-savvy traders but is becoming a core component of diversified portfolios, especially for those who value control, transparency, and the ability to move quickly in a changing financial world.

“SMSFs are undergoing a quiet transformation. What was once considered a fringe asset class is now being purposefully integrated into long-term retirement strategies,” she said.

Livewire: ETFs 2.0: Why the SEC’s move to fast-track spot crypto ETFs matters

In his latest article on Livewire Markets, BTC Markets’ Head of Finance Charlie Sherry explains how the SEC’s new listing standards fast-track spot crypto ETFs.

He said the change removes lengthy 19b-4 filings, cutting approval times from months to weeks and paving the way for 16 new ETF listings, including XRP and hybrid Bitcoin-Ethereum funds.

Announcements

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The week ahead: Economic events

Thursday, October 23rd

• United States Existing Home Sales

Friday, October 24th

• Japan Inflation Rate
• United Kingdom Retail Sales MoM, Manufacturing PMI, Services PMI
• Germany Manufacturing PMI
• United States Core Inflation Rate MoM, Core Inflation Rate, Inflation Rate MoM, Inflation Rate

Monday, October 27th 

• Germany Ifo Business Climate Index
• United States Durable Goods Orders

Tuesday, October 28th

• Germany GfK Consumer Climate

Wednesday, October 29th

• Japan Consumer Confidence
• Spain GDP Growth Rate, Annual Growth Rate

Source: Trading Economics

Market reflections

• United States: Softer labour data and lower Treasury yields lifted expectations for an October Fed cut
• Eurozone: Bond yields fell as the ECB signalled policy stability through 2026
• China: GDP growth slowed to 4.8%, with weak retail data offset by stronger industrial output
• Japan: A ¥13.9T fiscal package boosted equities while yen weakness revived rate hike debate
• Australia: Unemployment rose to 4.5%, fuelling speculation of an RBA rate cut in November

United States: Softer labour data and lower Treasury yields lifted expectations for an October Fed cut

The U.S. government shutdown has again delayed official data releases, leaving investors reliant on Fed commentary and private surveys. Fed Governor Christopher Waller highlighted a softening labour market and urged policy caution, reinforcing expectations for a 25-bps rate cut on 29 October and possibly another before year-end. A Reuters poll showed unemployment around 4.3%, while 10-year Treasury yields fell below 4%, their lowest level since mid-year.

Why it matters for crypto: Softer employment and lower yields improve liquidity conditions, historically supportive for digital assets, though uncertainty around growth keeps traders guarded.

Eurozone: Bond yields fell as the ECB signalled policy stability through 2026

With few major data releases, attention remained focused on rates. The 10-year German bund yield slipped to 2.55%, its lowest in four months, as investors sought safety. The European Central Banksignalled policy stability until 2026, while equities drifted and the euro softened slightly.

Why it matters for crypto: Steady European rates and lower yields may support modest risk-taking, but sluggish industrial activity remains a headwind for sustained inflows.

China: GDP growth slowed to 4.8%, with weak retail data offset by stronger industrial output

China’s Q3 GDP expanded 4.8% year-on-year, supported by industrial output up 6.5% and retail sales up 3.0%, but property investment fell 13.9%, highlighting ongoing weakness in the housing sector. New home prices declined 0.4% month-on-month, underscoring stress in real estate despite policy support. Authorities have hinted at targeted housing measures to stabilise growth.

Why it matters for crypto: Slower growth dampens market sentiment, but any new fiscal stimulus could lift broader risk assets, including digital tokens.

Japan: A ¥13.9T fiscal package boosted equities while yen weakness revived rate hike debate

Exports rose 4.2% year-on-year in September, marking the first gain in five months, while new Prime Minister Sanae Takaichi announced a ¥13.9 trillion (approximately US$19.3 billion) fiscal package to bolster growth. The Nikkei climbed to a record 49,316, the yen slipped near 151.3 per USD, and JGB yields eased to 1.66%.

Why it matters for crypto: Fiscal stimulus paired with potential BoJ tightening adds uncertainty but could encourage local investors to view crypto as an alternative store of value.

Australia: Unemployment rose to 4.5%, fuelling speculation of an RBA rate cut in November

Australia’s unemployment rate rose to 4.5%, the highest since 2021, fuelling expectations of an RBA rate cut in November. Governor Michele Bullock acknowledged lingering inflation pressures but signalled a review of the current policy stance. The Australian dollar weakened slightly as equities reached record highs.
Why it matters for crypto: Anticipated rate cuts and a softer currency may attract yield-seeking investors, though domestic confidence remains fragile.

Closing commentary

Crypto markets appear to be entering a phase of measured recalibration. Softer yields, uneven growth data, and diverging central bank paths are prompting investors to reassess risk while maintaining selective exposure to digital assets. Institutional inflows into Bitcoin ETFs highlight enduring confidence in crypto’s long-term role, even as near-term sentiment stays cautious.

Liquidity expectations continue to underpin Bitcoin and other large-cap assets, while macro uncertainty keeps speculative appetite in check. For longer-term participants, lower yields and expanding institutional access reinforce crypto’s structural foundations.

Takeaway: Patience and selectivity remain key, with Bitcoin holding firm, Ethereum’s tightening supply, and Solana and XRP awaiting their next catalysts.

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