Experts explained why the crypto market collapsed despite positive signals.
Date: 2025-11-03 Author: Oliver Abernathy Categories: BUSINESS
At the end of October 2025, digital assets plummeted in price, despite news indicating an improving macroeconomic situation. CryptoQuant specialists attributed the decline to weakening institutional demand and ongoing uncertainty in global politics and US monetary policy.
Experts noted that the US Federal Reserve cut its interest rate by 0.25%, bringing it to a range of 3.75-4%, and officially ended its quantitative easing (QT) program. This decision is traditionally considered a signal for an influx of liquidity into the market. Furthermore, the United States and China announced a "trade truce," and the creation of an altcoin staking ETF was approved—another positive development for the industry.
Nevertheless, Bitcoin and leading US indices continued to fall. Analysts note that institutional investors are cautious, as reflected in the Coinbase Premium indicator—the difference between the Coinbase price and the average market value. A negative value on this index indicates weak activity among major players and a decline in buying interest in the US. Historically, such dynamics often precede short-term market corrections.
Retail traders, on the other hand, responded enthusiastically to positive signals, but large funds and institutions largely determine the market's direction. CryptoQuant believes that institutional participants are currently adopting a wait-and-see approach.
Comments by Federal Reserve Chairman Jerome Powell significantly impacted investor sentiment. Despite the end of the QT, he emphasized that a rate cut in December remains uncertain. This statement raised doubts about the future easing of monetary policy and dampened market optimism.
Geopolitical factors also contributed to the situation. Although the US and China officially declared a "truce," sources within the negotiating teams called the agreements temporary. China expressed dissatisfaction with Washington's actions toward Taiwan, while reports of possible US nuclear tests heightened the atmosphere of uncertainty.
Asian markets saw a contrast: the Nikkei index reached record levels thanks to the Bank of Japan's stable policy and the yen's strength. However, this localized rise failed to offset the overall pressure on global markets.
According to CryptoQuant analysts, the current decline cannot be considered panic-driven; it is a natural reaction to the cooling of speculative sentiment after a period of euphoria. The medium-term outlook remains positive: as liquidity recovers and geopolitics stabilizes, demand for risky assets could return as early as early 2026.
