Over the past week, the crypto market seemed to have lost its last bit of confidence. After the sharp drop on 1011, the market has been sluggish ever since. On October 16, BTC fell below $107,000, ETH dropped below $3,800, and other altcoins plummeted drastically. A $19 billion liquidation swept across the board, leaving the entire crypto space in despair. The total market cap fell to $3.88 trillion, and the fear and greed index dropped to 32. ETF funds continued to outflow, US and Hong Kong stocks corrected from highs, liquidity issues at US regional banks resurfaced, explosions of on-chain projects began to spread, and even DAT companies, once seen as institutional benchmarks, experienced sharp declines and even instances of founders disappearing.

Bull-to-bear transitions are always so sudden. Haven't even caught up with this round of the blockchain wealth code, and is the bull market already ending?

I. Bitcoin Falls Below $110,000, ETF Sees Single-Day Outflow of $536 Million

This week's ETF redemption data became a landmark signal for the shift in crypto market sentiment. This was the largest single-day redemption scale since August, declaring an abrupt end to the sustained capital inflow trend throughout the previous summer. Bitcoin ETFs were once the market's most stable institutional buying force but have now started to become an exit for liquidity.

Data shows that the 11 Bitcoin ETFs had a net outflow of $536.4 million that day, while the Ethereum ETF saw $56.8 million withdrawn. Among them, BlackRock's iShares Bitcoin Trust saw an outflow of $29 million, Fidelity's FBTC fund saw an outflow of $132 million, the Grayscale-transformed GBTC decreased by $67 million, and mid-to-small-sized issuers like Bitwise and VanEck also experienced redemptions.

This round of capital flow reversal almost marked a阶段性节点 for the market turbulence over the past two weeks. Bitcoin's price retreated from a high of $126,000 to $107,000, during which leveraged position liquidations, abnormal Binance trading data, and escalating US-China trade tensions jointly triggered a chain reaction of selling.

Citigroup analysts pointed out that the correlation between Bitcoin and stock market volatility is rising significantly, and BTC's sensitivity to risk assets is returning to traditional financial logic. What was once seen as stable institutional demand now更像 is a transmitter of market sentiment. When panic spreads, it also becomes the first to react as an exit.

ETF capital withdrawal is the most直观 indicator of confidence透支. In a cycle of declining risk appetite, it often becomes a leading alarm before crypto assets lead the decline.

II. Two US Regional Banks Implode, Global Markets Plunge

Global markets suddenly fell across the board today. US stock index futures extended losses, with Nasdaq 100 futures down 1.5%, S&P 500 futures down 1.4%, and Dow Jones futures down 1%. In Hong Kong, the Hang Seng Index fell 2.5%, and the Hang Seng Tech Index fell over 4%.

According to reports from Bloomberg, Reuters, and others, on October 16 local time, two major US regional banks, Zions Bancorp and Western Alliance Bancorp, reported loan implosions. US bank stocks plummeted as a result, with the regional bank index falling 6.3% and the KBW Nasdaq Bank Index falling 3.6%, both marking their worst single-day performance since April. On the 16th, Zions Bancorp's stock price fell over 11%, Western Alliance Bancorp's stock price fell over 10%, and Jefferies Financial Group's stock price fell 9% that day.

Analysts pointed out that although the disclosed loss amounts for the two imploding banks are in the tens of millions of dollars, relatively small, the greater concern now is the打击 to investor sentiment rather than significant damage to the regional banks' balance sheets.

III. DAT Trust Collapse, Listed Company Halted by SEC and Flees

The DAT trend was initially driven by the success of models like MicroStrategy (now renamed Strategy) on Bitcoin. However, with the approval of ETFs, expectations of institutional accumulation, and the anticipated decline in Bitcoin's dominance, the DAT trend subsequently expanded to altcoins.

According to CoinGecko data, as of October, several DATs reported significant losses:

BitMine Immersion (BMNR): On October 13, the company announced it held 3,032,188 ETH, with an average purchase price of $4,154 per ETH. At the time of writing, ETH is trading below $4,000, and BMNR faces nearly 4% in unrealized losses.

Forward Industries (FORD): The company holds the largest Solana (SOL) position, with 6,822,000 SOL, equivalent to 1.248% of the total supply. FORD's average purchase price was $232, and its unrealized loss exceeds $245 million, approximately -15.5%.

AlphaTON Capital (ATON): The company accumulated 11.28 million TON, 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 WLFI worth over $1.3 billion, the company also faces a loss of nearly $300 million, as WLFI's current value is only $1 billion.

Other companies like Bit Origin suffered losses of approximately $2 million due to their DOGE fund holdings, while Pineapple Financial reported a loss of $2.7 million on its INJ position.

As of now, only Strategy company has truly achieved a synchronous良性 operation of Bitcoin's performance, its own stock price, and bond fundraising; other projects rely heavily on manipulation by the project teams or major backers to maintain surface stability.

Amid the hot RWA narrative and crypto funds flowing into real-world assets, the Hong Kong-listed company QMMM (NASDAQ: QMMM), once seen as a rising star in crypto treasuries, suddenly fell into suspicions of trading suspension and abandonment. After announcing a $100 million investment to build a crypto reserve, the company's stock price surged nearly tenfold in just three weeks, with the peak increase once exceeding 500 times. However, at the end of September, the US SEC ordered a trading halt due to suspected stock price manipulation, and the matter remains unresolved.

More dramatically, when media visited QMMM's Hong Kong headquarters, they found the office empty, its website and social platforms shut down, and the founder unreachable. As the first DAT company to flee, QMMM was once seen as a path to bring institutional funds into the crypto market but has now become a node where vulnerabilities集中爆发.

IV. Other Risks

Bank of Japan Deputy Governor Hints at Possible October Rate Hike: Uchida Shinichi said briefly at a financial conference in Tokyo on Thursday, "If the economic and price outlook is realized, the Bank of Japan will continue to raise policy rates and adjust the degree of monetary easing accordingly." This reiteration of the policy stance may strengthen market expectations for a rate hike at the next meeting on October 30. By indicating that Wednesday's Tankan survey showed business confidence at a good level, Uchida seemed to暗示 that the survey results confirm the economy is developing as the central bank expects.

Binance and Other Exchanges Investigated by French Government: According to Bloomberg, France is expanding its anti-money laundering scrutiny of cryptocurrency trading platforms. Regulators are trying to determine which of the more than 100 institutions registered in the country to provide crypto services will obtain EU-wide operating licenses in the coming months. French investigators said they have launched a judicial investigation into the world's largest cryptocurrency exchange Binance for money laundering, tax fraud, and other allegations, which Binance denies. The Paris prosecutor's office for economic and financial crimes (JUNALCO) stated that the investigation includes money laundering related to drug trafficking.

Crowded Buying and Wicking in Safe-Haven Gold: On October 16, international spot gold hit another record high. By noon that day, it had accumulated a gain of $200 for the week. 43% of investors believe "long gold" has become the most crowded trade in the market, even exceeding "long US tech giants" at 39%. This means institutional funds are flowing into gold on a large scale and with consensus.

US-China Trade War: On October 15, US President Trump claimed that the US has long been in a protracted trade war with China; however, US Treasury Secretary Besent still called out to Beijing, stating that if China stops its plan to control rare earth exports, the US is willing to extend the tariff suspension period again to seek resolution of the dispute.

Double-Dip: Following the crypto market crash on October 11, the crypto market experienced a double-dip, with Bitcoin BTC and Ethereum ETH falling sharply again. Bitcoin once fell as low as $103,528 and is now at $105,396, down 5.52% on the day; Ethereum fell as low as $3,674 and is now at $3,775, down 6.97% on the day. According to Coinglass data, in the last 24 hours, 299,251 people were liquidated globally, with total liquidation amounts of $1.22 billion, including $335 million in Bitcoin long positions and $201 million in Ethereum long positions.

Market Recovery Period: After large-scale liquidations occur in the market, the recovery of market liquidity, sentiment, and capital confidence does not happen immediately but requires a cooling-off period. After large-scale liquidations, short-term leverage risks have been significantly released, but market makers' liquidity recovery takes time.

V. Future Outlook

Between September 17 and October 3, 2025, a Coinbase survey of over 120 global investors showed that most respondents are bullish on Bitcoin, with 67% of institutional investors and 62% of non-institutional investors holding a positive view of Bitcoin's prospects over the next 3-6 months. Nearly half (45%) of institutional investors believe the current phase is the late stage of a bull market, while only slightly over a quarter (27%) of non-institutional investors hold this view. Both institutional investors (38%) and non-institutional investors (29%) view the macro environment as the biggest potential risk facing the crypto market over the next 3-6 months. Click to read "Coinbase: What Global Investors Think About the Crypto Market in the Next 3-6 Months"

Bitwise CIO stated: The 1011 flash crash will not have any lasting impact. The long-term forces driving this market – improving regulation, increased allocation by institutional investors, and the growing recognition that cryptocurrency is disrupting all traditional markets – remain intact. It also helps to zoom out: in 2025, Bitcoin is up 21%, and the Bitwise 10 Large Cap Crypto Index is up 22%.

The crypto market might be slightly nervous in the short term. Market makers and liquidity providers often withdraw from the market for a few days after significant volatility, and the lack of liquidity can lead to sharp price movements up or down. But over time, the market will slowly regain vitality and refocus on the fundamentals of cryptocurrency. By then, the bull market will continue. Click to read: "Bitwise: Three Questions Show the 1011 Flash Crash is a Flash in the Pan, Bull Market Will Continue"

In its "Cryptocurrency Charts Q4 2025: Navigating Uncertainty" research report released on October 16, Coinbase expressed cautious optimism for Q4 2025. It believes the crypto bull market still has room to continue but will be more cautious after the October 11 event. The market currently still has ample liquidity, a strong macro background, and favorable regulatory dynamics.

Although the labor market appears to be cooling, concerns about a significant economic contraction seem overblown. Regulation is moving in the right direction. With the signing of the GENIUS Act, the stablecoin sector now has a clear framework; next, the CLARITY Act (Clarity for Digital Assets Act) will be introduced, which will clarify the classification standards for digital assets and establish clear regulatory jurisdiction. The current environment is particularly favorable for Bitcoin, while a more cautious strategy is needed for altcoin portfolio allocation.