CMC AI

Why is the market down today?

Researched for 13s

TLDR

The crypto market fell 1.57% over the last 24 hours, extending a 3.2% weekly decline. Key drivers include escalating U.S.-China trade tensions, Bitcoin ETF outflows, and technical breakdowns below critical support levels.

Macro Risk-Off (Bearish Impact) – Trade war fears spooked equities and crypto.

ETF Outflows (Bearish Impact) – U.S. spot Bitcoin ETFs saw $858M net outflows this week.

Leverage Unwind (Bearish Impact) – $1B+ liquidations in 24h amplified selling pressure.

Deep Dive

1. Macro Risk-Off Spillover (Bearish Impact)

Overview:

U.S.-China trade tensions escalated after China expanded rare earth export controls (Oct 17), triggering retaliatory tariffs. Bitcoin fell 3% to $108k, correlating tightly with Nasdaq (-0.90 24h correlation to SPY). Crypto’s sensitivity to risk assets intensified as investors fled to gold (+0.27% vs crypto’s drop).

What it means:

Crypto remains a “risk-on” asset class, with 24h price action 90% correlated to tech stocks. Trade war headlines eroded confidence in growth-sensitive assets.

Watch for:

Federal Reserve comments on tariffs’ inflation impact (next meeting: Oct 29-30).

2. Bitcoin ETF Outflows (Bearish Impact)

Overview:

U.S. spot Bitcoin ETFs recorded $858.7M in net outflows this week (Oct 13-17), reversing September’s institutional inflows. BlackRock’s IBIT saw its first outflow since January 2024, signaling profit-taking after BTC’s 2025 rally.

What it means:

ETF flows drive short-term BTC price momentum. Sustained outflows could delay a market bottom until institutional buyers return.

3. Technical Breakdown & Leverage Reset (Bearish Impact)

Overview:

BTC broke below its 200-day EMA ($108k), triggering stop-loss orders. The total crypto market cap sits at $3.63T, below the 50-day SMA ($3.94T). RSI14 at 30.8 signals oversold conditions, but derivatives data shows panic:

- Perpetuals volume surged 26% to $618T

- Funding rates turned negative (-0.00056%)

What it means:

Technical traders sold the breakdown, while negative funding rates discouraged longs. The market needs to reclaim $3.74T (Fibonacci 78.6% level) to stabilize.

Conclusion

The crypto dip reflects a trifecta of macro uncertainty, institutional profit-taking, and technical breakdowns. With fear dominating sentiment (CMC Fear & Greed Index: 25/100), traders should monitor whether Bitcoin holds $104k support. Can ETF flows reverse before the Oct 30 Fed meeting?