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Hello, this is Jinhyuk Seo, a macro strategist from Wall Street. Today, the market faced a massive wave of surging US Treasury yields and was put to a fierce liquidity test. The 10-year Treasury yield, which hit 5.27%, the highest since 2002, evaporated $400 billion from the gold and silver markets in just 15 minutes, and triggered widespread risk-off sentiment, liquidating over 120,000 positions in the cryptocurrency market. Where is the market looking now? In the short term, we should focus on liquidity contraction and increased risk-aversion.
However, even in this macro environment, steady net inflows into Bitcoin spot ETFs and efforts to secure long-term growth momentum through integration with AI technology can be interpreted as positive signals. The current correction may be a process of ensuring market health, but increased short-term volatility seems unavoidable. It is time to analyze the market direction coldly with data and figures, without being swayed by emotions.
| Indicator | Value | 24-hour Change |
|---|---|---|
| Bitcoin (BTC) | $83257.0 | -2.68% |
| Ethereum (ETH) | $2573.18 | -4.62% |
| Ripple (XRP) | $1.42 | -5.08% |
| Solana (SOL) | $116.23 | -3.73% |
| Dogecoin (DOGE) | $0.08899 | -5.03% |
| Fear & Greed Index | 64 (Greed) | Previous Day 71 (Greed) |
| S&P 500 (SPY) | $777.22 | -0.24% |
| NASDAQ 100 (QQQ) | $757.73 | -0.25% |
| VIX Volatility Index | 16.19 | - |
| US 10-year Treasury Yield | 5.27% | - |
| BTC Funding Rate | -0.000010 | -0.00% |
| ETH Funding Rate | -0.000033 | -0.00% |
The biggest factor dominating the market currently is the sharp rise in the US 10-year Treasury yield. The 5.27% yield is the highest since 2002, which means increased funding costs and a higher discount rate for future cash flows. This interest rate environment has caused massive capital outflows not only from risky assets like stocks but also from the gold and silver markets, traditionally considered safe havens, leading to a $400 billion 'evaporation'.
The Fed meeting minutes also showed that all participants supported a 25bp rate hike, and many judged that another hike by the end of the year might be appropriate, indicating a high likelihood of a sustained high-interest rate stance for the time being. The Dollar Index also showed strength at 121.3848, which will continue to pressure the global liquidity environment. Former President Trump's remark, "The Fed seems to want the country to not do well," shows political discontent with the current interest rate policy, but the market is reacting more sensitively to the Fed's data-driven policy decisions.
Bitcoin fell -2.68% over the past 24 hours to $83,257.0, threatening the $83,000 support level. The 7-day volatility also continued its decline at -0.61%, which is attributed to the direct hit from large-scale leverage liquidations following the surge in US Treasury yields. According to reports, a recent $700 million liquidation shock occurred, with long position liquidations exceeding 90%, severely dampening investor sentiment.
However, positive signs are being observed amidst this short-term downtrend. Robinhood acquired $25 million worth of Bitcoin, and Bitcoin spot ETFs saw a net inflow of $118.86 million (approximately 159.2 billion KRW), indicating continued interest from institutional investors. As Bitwise's analysis suggests, Bitcoin's Q3 rally could be a signal of a 'regime change', and news that 'whales accumulated over $1.2 billion in October' suggests that demand for Bitcoin remains robust in the long term.
Ethereum saw a sharper decline than Bitcoin, plummeting -4.62% over the past 24 hours to $2,573.18. Ethereum spot ETFs recorded net outflows for 7 consecutive days, with $201.89 million (approximately 270.3 billion KRW) exiting, and long position liquidations reaching $176.73 million, exposing the market's vulnerability. News that BlackRock sold Ethereum and bought Bitcoin suggests portfolio rebalancing by institutional investors, adding short-term pressure on Ethereum.
Ripple (XRP) also fell -5.08% over the past 24 hours to $1.42, threatening the $1.40 support level. With $150 million worth of XRP transferred to Binance, concerns about selling pressure are growing, and news of XRP spot ETFs falling 40% from their peak shows the reality that institutional capital inflows do not directly lead to price increases. However, strategic partnerships between Meritz Securities and Ripple, and news of Evernode, an XRP accumulation company, postponing its Nasdaq listing, suggest long-term possibilities for institutional integration.
Solana (SOL) corrected -3.73% to $116.23, but strong ecosystem expansion news stands out, such as its focus on the RWA (Real World Asset tokenization) market and a record high in monthly active programs in September. In particular, Ferrari stock tokens being launched on Solana leads the trend of tokenizing traditional assets. Meanwhile, Dogecoin (DOGE) plunged -5.03%, showing the vulnerability of memecoins in general, and in the Binance USDT-M futures market, certain small altcoins like METUSDT (+35.68%) and GTCUSDT (+27.63%) showed high volatility and individual upward trends.
The Fear & Greed Index, which indicates overall market sentiment, dropped from 71 to 64, still remaining in the 'Greed' zone but reflecting a somewhat cooling atmosphere. The three major US stock indices also closed slightly lower, showing caution towards risky assets in general.
From a long-term perspective, the combination of AI and cryptocurrency is noteworthy. Coinbase analyzed that stablecoins are most suitable for AI agent micropayments, and the NEAR protocol expects to benefit from AI. Arthur Hayes put forth an interesting forecast that the end of AI overinvestment will lead to bailouts, and that liquidity will flow into the cryptocurrency market. However, potential risks that new technological advancements may bring, such as the Ethereum Foundation researcher warning about the threat of AI-based private key recovery, should not be overlooked.
The regulatory environment is also a crucial variable. The application for a 3x leveraged BTC/ETH ETF by a US trust and Cardano's launch of a regulatory-compliant token standard show ongoing efforts for institutional integration. However, the CFTC Chairman's policy of limiting high-leverage and cases of German financial authorities rejecting MiCA licenses remind us that regulators still maintain a cautious stance.
While short-term corrections due to high-interest rate-induced liquidity contraction and large-scale liquidations are inevitable, institutional inflows into Bitcoin and the emergence of the AI theme present new long-term growth drivers for the cryptocurrency market.
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