Macro update

The market performed nicely on the back of some dovish macro signals and renewed US-China dialogue reigniting risk appetite. The announcement of a Trump-Xi summit in Seoul, combined with a softer U.S. CPI print (3.0% YoY vs 3.1%), drove a broad rebound across assets. Equities gained momentum with the S&P 500 up 1.9%, as volatility cooled off (VIX ~16) and treasury yields eased as rate cut expectations firmed ahead of this week’s FOMC.

In digital assets, Bitcoin performed nicely (5.3%), climbing on the week to surpass $115k levels, which is the lost ground from early-October liquidations. The move was amped by $160m in short liquidations following confirmation of a U.S. trade framework, marking one of the sharpest squeezes in weeks. Ethereum tracked higher toward $4,200, while gold unwound nearly 7% from its highs, signalling a clear rotation from defensives into risk assets.

Beyond majors, flows showed early signs of broadening. DeFi and AI names led gains on strong protocol revenue prints and improving on-chain activity, while Utilities & Tooling benefited from infrastructure-related rotation as new L2 deployments and restaking primitives drew liquidity.

On the perp side, funding rates turned positive again across most majors, suggesting that sidelined capital is gradually re-entering the market but positioning remains far from crowded. Stablecoin supply, a useful liquidity proxy, is ticking higher for the first time since September, reinforcing that macro tailwinds are beginning to translate into fresh inflows.

ETF flows also continue to provide a steady base of demand: U.S. spot BTC ETFs absorbed moderate inflows through the week even as volumes thinned, underscoring how structural demand remains sticky. Open interest in BTC and ETH perps is rebuilding at a measured pace after the early-month flush, indicating a healthier derivative backdrop with cleaner leverage and more balanced funding.

While Uptober had a bit of a false start, macro tailwinds, cooling inflation, “stabilizing” geopolitical tension and a dovish FED are setting the stage for a supportive rest of the year, which historically (Q4) has been the strongest for Bitcoin. Positioning is also cleaner with some volatility ebbing away, making the way for that capital rotation towards crypto, which is what we are seeing right now.

Macro tailwinds, cooling inflation, improving global diplomacy, and an imminent Fed pivot, are setting the stage for renewed upside into November, historically Bitcoin’s strongest month. Positioning is cleaner, volatility subdued, and capital rotation is gradually steering toward crypto. With liquidity conditions improving and sentiment stabilising, the setup into Q4 remains constructive, favouring further risk-on continuation.

Our take:

“Markets are rotating back into risk as softer inflation and renewed U.S.–China dialogue lift sentiment, cleaner positioning sets up a constructive path into November"

Markets are shifting back into risk mode as macro data turns supportive. Softer inflation and renewed U.S.–China dialogue have eased pressure on yields and brought volatility lower, helping risk assets find their footing.

Bitcoin has reclaimed early-October losses with steady ETF inflows and remains the clear anchor for market structure, while sectors like DeFi and AI are leading the bounce.Altcoins are still trading in rotation, showing pockets of strength but little broad conviction. With cleaner positioning, calmer vols, and better macro visibility, the setup into November looks healthy, a constructive backdrop for further recovery and rotation across crypto.

Notable headlines

• PMorgan now allows institutional clients to post BTC and ETH as collateral, a key step toward broader crypto integration.
• The Federal Reserve is studying “payment accounts” that would give crypto and fintech firms direct access to Fed payment rails.
• Coinbase expanded its retail lineup with a $375M acquisition of Echo, a platform simplifying on-chain portfolio management.
• Polychain Capital led a $110M investment in Berachain to build a crypto treasury supporting on-chain liquidity and governance.
• Meteora completed its TGE and launched Presale Vaults, Meteora Invent, and Dynamic Fee Sharing to improve capital efficiency.
• MetaETH kicked off its public sale on Sonar/Echo, starting at a $1M FDV.
• Rising chatter around x402 Protocol, which was introduced in May, is fueling momentum across the blockchain-based AI agent narrative.