The market continues to be sluggish after the 1011 flash crash: What negative factors are coming? Is the bull market still there?

Compiled by Shan Ouba, Golden Finance. Over the past week, the crypto market seemed to have lost its last bit of confidence. After the October 11th crash, the market has never recovered. On October 16th, BTC fell below $107,000, while ETH plummeted below $3,800. Other altcoins plummeted even further. $19 billion in liquidations swept across the crypto community, sending wails of grief through the entire crypto community. Total market capitalization plummeted to $3.88 trillion, and the panic index dropped to 32. ETF funds continued to flow out, US and Hong Kong stocks retreated from their highs, and liquidity issues resurfaced at US banks. On-chain project failures began to spread, and even DATs, once considered benchmarks for institutional investors, plummeted and some even fled. Bull and bear market transitions are always so sudden. Is the current blockchain wealth generation cycle about to end? 1. Bitcoin fell below $110,000, and ETFs saw $536 million in single-day outflows. This week's ETF redemption data signaled a shift in crypto market sentiment. This was the largest single-day redemption since August, marking an abrupt end to the inflows that had persisted throughout the summer. Bitcoin ETFs, once the market's most resolute source of institutional buying, have now become a liquidity outlet. According to data, the 11 Bitcoin ETFs had a total net outflow of US$536.4 million on the day, while the Ethereum ETF was withdrawn. $56.8 million. Of this, BlackRock's iShares Bitcoin Trust saw outflows of $29 million, Fidelity's FBTC Fund saw outflows of $132 million, and Grayscale's GBTC, after its transformation, saw a $67 million decrease. Smaller and medium-sized issuers like Bitwise and VanEck also saw redemptions. This reversal in capital flows almost marked a turning point in the market turmoil of the past two weeks. Bitcoin prices fell from a high of $126,000 to $107,000. During this period, the liquidation of leveraged positions, abnormal trading data on Binance, and escalating US-China trade tensions triggered a chain reaction of sell-offs. Citi analysts noted that the correlation between Bitcoin and stock market fluctuations is significantly increasing, and BTC's sensitivity to risky assets is returning to traditional financial logic. Institutional demand, once seen as stable, is now more of a transmitter of market sentiment. When panic spreads, it also becomes the first outlet for reaction. ETF capital withdrawal is the most direct indicator of overdrawn confidence. During periods of declining risk appetite, it often serves as a warning before crypto assets lead declines. Second, the collapse of two regional US banks triggered a global plunge. Today, global markets suddenly plummeted across the board. US stock index futures continued their decline, with Nasdaq 100 futures down 1.5%, S&P 500 futures down 1.4%, and Dow futures down 1%. In Hong Kong, the Hang Seng Index fell 2.5%, and the Hang Seng Tech Index fell over 4%. According to Bloomberg, Reuters, and other media reports, on October 16th, local time, two major US regional banks, Zions Bancorp and Western Alliance, reported loan defaults. US bank stocks plummeted as a result, with the regional bank index falling 6.3% and the KBW Nasdaq Bank Index dropping 3.6%, both posting their worst single-day performances since April. Zions Bancorp's stock price fell over 11%, while Western Alliance's stock price plummeted over 10%. Jefferies' stock price also fell 9% that day.

Analysts pointed out that although the losses disclosed by the two banks in this crash are relatively small, in the tens of millions of dollars, the greater concern now is that investor sentiment will be hit rather than the balance sheets of regional banks being severely damaged.

Third, the trust in DATs collapsed and listed companies were suspended by the SEC and ran away

The DAT trend was initially driven by the success of models such as MicroStrategy (now renamed Strategy) on Bitcoin. However, with the approval of ETFs, institutional accumulation, and expectations of a decline in Bitcoin's dominance, the DAT trend subsequently expanded to altcoins. According to CoinGecko data, several DATs reported significant losses as of October: BitMine Immersion (BMNR): On October 13, the company announced holdings of 3,032,188 ETH, at an average purchase price of $4,154 per ETH. As of this writing, with ETH trading below $4,000, BMNR faces unrealized losses of nearly 4%. Forward Industries (FORD): The company holds the largest Solana (SOL) position, with 6,822,000 SOL, representing 1.248% of the total supply. FORD's average purchase price was $232, resulting in an unrealized loss of over $245 million, or approximately -15.5%. AlphaTON Capital (ATON): The company holds a cumulative 11.28 million TON tokens, representing 0.448% of the total supply, at a total cost of $30 million. The current value of its TON holdings is $24.87 million, implying a loss of $5.13 million. ALT5 Sigma (ALTS): After accumulating over $1.3 billion worth of WLFI, the company is facing losses of nearly $300 million, with WLFI currently valued at just $1 billion. Other companies, such as Bit Origin, have suffered losses of approximately $2 million on their DOGE holdings, while Pineapple Financial reported a $2.7 million loss on its INJ holdings. To date, only Strategy has truly achieved a healthy and synchronized operation of Bitcoin's market, its own stock price, and bond issuance; all other projects rely on the sophisticated manipulation of the project owners or major financial backers to maintain a semblance of stability. Amidst the heated RWA narrative and the influx of crypto funds into real-world assets, QMMM (NASDAQ: QMMM), once considered a rising star in crypto treasuries, has suddenly been suspended and faced with suspicions of disappearance. After announcing a $100 million investment in a crypto reserve, the company's stock price skyrocketed nearly tenfold in just three weeks, reaching a peak of over 500 times. However, in late September, the US SEC suspended trading, alleging stock manipulation, and the case remains unresolved. Even more dramatic, a media visit to QMMM's Hong Kong headquarters revealed a deserted office, its website and social media platforms down, and its founder missing. As the first DAT to fail, QMMM, once considered a gateway to attract institutional capital into the crypto market, has now become a focal point for its vulnerability.

IV. Other Risks

Bank of Japan Deputy Governor Hints at Possible October Rate Hike: In a brief speech at a financial conference in Tokyo on Thursday, Shinichi Uchida said: "If the economic and price outlook materializes, the Bank of Japan will continue to raise its policy interest rate and adjust the degree of monetary easing accordingly." This reaffirmation of this policy stance is likely to reinforce market expectations of a rate hike at the next meeting on October 30. By stating that a short survey released on Wednesday showed good business confidence, Uchida appeared to suggest that the survey results confirm that the economy is developing as expected by the central bank. Binance and several other exchanges are under investigation by the French government: According to Bloomberg, France is expanding its anti-money laundering scrutiny of cryptocurrency trading platforms, and regulators are trying to determine which of the more than 100 institutions registered to provide crypto services in the country will obtain EU-wide operating licenses in the coming months. French investigators said they have launched a judicial investigation into money laundering, tax fraud and other allegations against Binance, the world's largest cryptocurrency exchange. Binance has denied the allegations. The Economic and Financial Crimes Department (JUNALCO) of the Paris Public Prosecutor's Office said in a statement that the investigation includes money laundering activities related to drug trafficking. Safe-haven gold sees crowded buying and short-selling: On October 16th, international spot gold hit a new all-time high. As of noon that day, it had already risen by $200 this week. 43% of investors believe that "long gold" has become the most crowded trade in the market, even exceeding the 39% who believe they are "long the Big Seven" in US stocks. This suggests that institutional funds are pouring into gold on a large scale and in a consensus manner. US-China Trade War: On October 15th, US President Trump declared that the United States and China are already locked in a protracted trade war. However, US Treasury Secretary Bensont called on Beijing to extend the tariff suspension on China if China halts its plans to control rare earth exports, seeking to resolve the dispute. Second Bottoming Out: Following the crypto market crash on October 11th, the crypto market experienced a second bottoming out, with Bitcoin (BTC) and Ethereum (ETH) plummeting again. Bitcoin hit a low of $103,528 and is currently trading at $105,396, a 5.52% drop on the day. Ethereum hit a low of $3,674 and is currently trading at $3,775, a 6.97% drop on the day. According to Coinglass data, in the past 24 hours, a total of 299,251 individuals worldwide were liquidated, totaling $1.22 billion. Bitcoin long positions accounted for $335 million, while Ethereum long positions accounted for $201 million. Market Recovery Period: Following a large-scale liquidation, the recovery of market liquidity, sentiment, and investor confidence is not immediate; a cooling-off period is required. Following the large-scale liquidations, short-term leverage risk has been significantly reduced, but market maker liquidity recovery will take time. V. Market Outlook: A Coinbase survey of over 120 global investors conducted between September 17 and October 3, 2025, revealed that the majority of respondents were bullish on Bitcoin, with 67% of institutional investors and 62% of non-institutional investors expressing a positive outlook for Bitcoin over the next three to six months. Nearly half (45%) of institutional investors believe we are in the late stages of a bull market, while just over a quarter (27%) of non-institutional investors hold this view. Both institutional (38%) and non-institutional investors (29%) view the macroeconomic environment as the greatest potential risk facing the cryptocurrency market over the next three to six months. Click to read "Coinbase: What Do Global Investors Think About the Crypto Market in the Next 3-6 Months?" Bitwise's Chief Investment Officer stated: "The October 11 flash crash will not have any lasting impact." The long-term forces driving this market—improving regulation, increasing institutional investor allocations, and a growing understanding that cryptocurrencies are disrupting all traditional markets—remain intact. A longer-term perspective is also helpful: By 2025, Bitcoin is projected to rise 21%, while the Bitwise 10 Large-Cap Cryptocurrency Index is projected to rise 22%. The crypto market may be somewhat nervous in the short term. Market makers and liquidity providers typically exit the market within a few days of significant volatility, and a lack of liquidity can cause significant price fluctuations. But over time, the market will slowly regain its vitality and refocus on cryptocurrency fundamentals. The bull market will then continue. Click to read: "Bitwise: Three Issues Suggest the October 11 Flash Crash Was a Blip, the Bull Market Will Continue." In its October 16th report, "Cryptocurrency Charts for Q4 2025: Navigating Uncertainty," Coinbase expressed cautious optimism about the fourth quarter of 2025. They believe the crypto bull market still has room to continue, but after the events of October 11th, they will be more cautious. The market currently boasts ample liquidity, a strong macroeconomic backdrop, and favorable regulatory developments. While the labor market appears to be cooling, concerns about a significant economic contraction appear overblown. Regulation is moving in the right direction. With the signing of the GENIUS Act, the stablecoin sector now has a clear framework; the CLARITY Act (Digital Asset Clarity Act) will be introduced next, clarifying the classification standards for digital assets and establishing clear regulatory jurisdiction. The current environment is particularly favorable for Bitcoin, while altcoin holdings require a more cautious strategy.