NextFin news, On October 29, 2025, the Federal Reserve concluded its Federal Open Market Committee (FOMC) meeting announcing a 0.25% rate cut to a target range of 3.75%-4%, marking the lowest level in three years. This decision came amid a divided committee, with dissent from Kansas City Fed President Jeffrey Schmid and White House Council of Economic Advisers member Stephen Miran advocating for differing approaches. Concurrently, U.S. President Donald Trump escalated trade tensions by threatening a 100% tariff on Chinese imports, intensifying market fears.
These developments precipitated a significant bearish reaction in global financial markets including cryptocurrencies. Bitcoin experienced a steep plunge, falling below $107,000—the lowest in months—before modestly rebounding above $109,000 by early October 31. According to CoinMarketCap, the total cryptocurrency market capitalization retreated by roughly 0.46%, settling near $3.69 trillion. Notably, October 2025 marked Bitcoin’s poorest “Uptober” performance in seven years, with a 6.8% price decline. Ethereum also followed the downtrend, slipping approximately 1.7% to around $3,850 during this period.
Binance founder and CEO Changpeng Zhao (CZ) issued a cautionary signal on Twitter, forecasting “many dips along the way” amid the unfolding red weekend market environment. This remark underscores a continued volatile period for cryptocurrencies precipitated by macroeconomic policy shifts and geopolitical uncertainties.
On-chain analytics revealed that the bulk of Bitcoin’s selloff primarily originated from short-term holders. CryptoQuant analyst CryptoOnChain identified over 10,000 BTC moved onto Binance wallets within a 24-hour span, indicative of speculative “hot money” exiting positions rapidly. This pattern points to a classic shakeout of weak hands reacting impulsively to external shocks rather than a fundamental erosion of confidence. Conversely, long-term investors, or so-called “diamond hands,” exhibited minimal selling activity, suggesting sustained conviction in Bitcoin’s underlying value and future prospects.
The volatility surge coincided closely with a massive liquidation event on October 10, where Bitcoin lost more than $19 billion in open positions, triggered by Trump’s tariff escalation. Data shows retail traders sold an additional 9,200 BTC around this timeframe, reflecting an intense deleveraging phase amidst heightened risk aversion. Meanwhile, increased withdrawal of Bitcoin to private wallets by large holders reduced supply on exchanges, elevating the scarcity index and potentially mitigating further downside pressure. Such dynamics indicate a bifurcated market response—short-term traders rapidly adapt to shifts, while strategic holders accumulate or hold steady.
Analytically, these events crystallize a complex interplay between monetary policy easing, geopolitical tensions, and market psychology. The Federal Reserve’s rate cut, expected to stimulate risk asset optimism, paradoxically ignited liquidations as investors interpreted it as underscoring economic vulnerabilities. Trump's tariff announcement added an exogenous shock, amplifying risk-off sentiment. On-chain data confirms the predominance of speculative capital movements in the selloff, while the structural integrity of the market remains intact given stable long-term holder behavior.
Looking ahead, the crypto market may continue to navigate choppy waters with episodic selloffs and rebound attempts. CZ’s warning of “dips along the way” is consistent with a market in a consolidation phase, balancing between short-term volatility and long-term accumulation. The reduction of BTC liquidity on exchanges by whales hints at a potential floor forming, which could constrain rapid price declines. Nonetheless, ongoing macroeconomic uncertainties, including trade policy developments and Federal Reserve guidance, will heavily influence sentiment and trading behavior.
Investors and analysts should monitor liquidity flows, liquidation volumes, and holder composition closely to gauge market resilience. The divergence between short-term traders’ panic-driven sales and steadfast long-term holders indicates that sharp price corrections may be temporary shakeouts rather than structural bear market signals. As regulatory clarity and economic conditions evolve under President Donald Trump’s administration, the coming weeks will be critical to defining the trajectory of crypto prices into year-end.
In conclusion, the market is currently characterized by heightened volatility driven by intersecting policy decisions and geopolitical risk. While near-term price dips are probable, underlying accumulation by institutional and long-term investors suggests a foundational strength supporting recovery potential. Strategic buying on dips, as advocated by CZ, may present opportunities amidst market turbulence. Vigilant analysis of on-chain metrics and external economic indicators remains essential for navigating this volatile environment.
Explore more exclusive insights at nextfin.ai.
