Macro update

Markets regained footing late last week as confirmation of the Trump–Xi meeting in Seoul helped ease tariff-related stress. The S&P 500 recovered 1.3% while the VIX retreated from highs near 29, and Treasury yields edged lower as investors rotated back into defensives. Gold extended its parabolic run above $4,350/oz, adding over $600B in market cap in days, while silver followed to multi-year highs. With the U.S. government shutdown delaying the CPI release, investors turned to earnings read-across for inflation and growth signals, early reports from U.S. banks were mixed but stable.

Importantly, the global easing cycle remains intact. Central banks are cutting into relative strength rather than weakness, a rare backdrop historically seen in 1984, 1995, and 2024 , typically associated with prolonged risk-on conditions. Despite stretched valuations in equities, liquidity conditions remain supportive for digital assets.In crypto, BTC briefly dipped to ~104K before bouncing into the weekend to close around $109k (-4.1% WoW). Market structure remains healthy: positioning is cleaner, open interest reset lower, and ETF outflows, though heavy early in the week, are stabilising.

After a spree of narratives we churned through on the altcoin side, we’re patiently awaiting for what pops up on the horizon next as leverage is (very) slowly trickling back into the market. Capital remains concentrated in size and liquidity, while stablecoin issuance continues to climb, suggesting latent risk appetite waiting for catalysts.

Breadth (% of tokens with +ve price activity over past 30days) remains narrow, with only 20–25% of tokens, while intracorrelation between cohorts is near summer highs consistent with a market driven by top-down macro rather than idiosyncratic factors. Realised volatility in BTC sits at a six-month high post-liquidations, but implied vols are stable, indicating digestion rather than renewed stress.

Looking at the index level, digital assets declined across all sectors, with the GMCI-30 down 3.7% for the week. The pullback was broad-based, led by Gaming (-7.2%) and AI (-5.9%), while Layer 1s, Layer 2s, and Meme tokens each fell around 5%. DeFi (-3.1%) and DePIN (-3.8%) were comparatively more resilient, while BTC (-3.2%) and ETH (-3.3%) mirrored the broader market trend.

Our take:

“Markets are still digesting the liquidation shock, but structure remains constructive, cleaner positioning and resilient macro conditions leave room for recovery once data visibility returns"

The setup into late October remains balanced: leverage has been purged, vols are contained, and macro remains supportive. Bitcoin continues to act as the structural anchor with consistent ETF flows and tight exchange supply, while ETH and L1/L2s show early signs of relative strength.

Altcoins, meanwhile, remain in low-conviction churn mode, reflecting selective participation rather than broad inflows, a dynamic that is unlikely to change until macro catalysts (Fed, CPI, and Big Tech earnings) reintroduce directional clarity.

The path of least resistance still seems to be upward. With structural inflows steady, fiscal risks known, and positioning light, any stabilisation in macro volatility could provide the spark for the next leg higher.

Notable headlines

• MegaETH announced plans to repurchase 4.75% of company shares from early investors, signaling confidence ahead of its upcoming public token sale.
• Aave revealed Version 4, expanding its collateral universe to include equities, ETFs, bonds, funds, real estate, and private credit, marking a major step toward on-chain TradFi integration.
• MetaDAO closed a $34 million raise, dramatically surpassing its $2 million target and highlighting continued investor interest in DAO infrastructure.
• Monad activated its airdrop claim portal, enabling early users to redeem their MON tokens and kick-starting community distribution.
• MetaMask partnered with Polymarket to integrate on-chain prediction markets directly into the wallet interface, broadening user functionality.
• Pyth Networkteamed up with Kalshi to deliver regulated prediction market data on-chain, enhancing oracle coverage of real-world event outcomes.