I. Introduction: diagnosing a Structural Inflection Point in the Market at 06:00 UTC on October 29, 2025
as of 06:00 UTC on October 29, 2025, the cryptocurrency market has entered a short-term correction phase. In particular, over the past 24 hours, Bitcoin (BTC) has hit a high of $116,074.3 on Binance and then sharply retraced, currently trading at $112,560.5, representing a -1.on the Upbit spot market, BTC is also down -0.40%, trading at KRW 168,310,000, with major altcoins suffering a larger correction than BTC, with Ethereum (ETH) down -2.85%, Chainlink (LINK) down -2.30%, and Dogecoin (DOGE) down -3.37%.
the most notable phenomenon in the current market is the extreme disconnect between the macroeconomic good news and the internal structure of the crypto market. the US equity markets in New York have continued their strong bull run, with the Dow, S&P 500, and Nasdaq all seeking new all-time highs, especially after the Fed officially announced the end of quantitative tightening (QT), signaling a structural injection of liquidity. Despite this, the crypto markets have been overwhelmed by internal selling pressure and risk aversion, indicating that the market is reacting more to the failure to break through short-term technical resistance and altcoin liquidity risks, despite the massive liquidity favor.
this report analyzes BTC's downside support and the volatility of Ethereum and altcoins, focusing on the upbit spot price, and further diagnoses the degree of overheating of short positions through the funding ratio of the derivatives market.
II. Dissecting the "cliff drop" in investor sentiment and buy recommendation scores
A. Rapid deterioration in sentiment indicators: failed breakout attempts and disappointment selling
the provided Buy Recommendation Score history clearly reveals just how extreme investor sentiment has been over the past early morning hours.
breakdown of crypto buy recommendation scores and sentiment over time
time of daybuy Recommendation Scorekey Sentiment Changers 2025-10-29 03:46 2.43 break above $119,500, institutional buying, downside-limited outlook prevails, volatility risks warrant a mid-range entry recommendation 1 Oct-29, 2025 04:46 1.1 mixed, small overweight recommendation, new upside potential, Sailor long, Standard Chartered cautious 2025-10-29 05:43 -0.25 negative sentiment prevails due to recent short-term retractions and talk of introducing a proxy index; slightly negative, reflecting past mixed trends
at 03:46 UTC, sentiment peaked at 2.43 as bitcoin broke above $115,000 in anticipation of a new bull run. At the time, the market was dominated by optimism that this breakout could signal a new bull run. However, when this psychological resistance was thwarted and the price of bitcoin began to retrace sharply back below $115,000, the score dropped sharply from 1.1 to -0.25in just two hours.
this psychological "cliff fall" implies more than just a price drop. at the 2.0+ level, where bullish sentiment is at its peak, large leveraged long positions are built. the failure to break above the $119,500 resistance level was a technically significant failure, which promptly triggered an explosion of 'disappointment selling', suggesting that long positions that had been rebuilt after the 'short liquidation explosion' observed in New York in the early hours of the morning were forced to liquidate or sell off to bet on the downside, proving that the market's short-term downside support was very fragile.
B. Institutionalization talk triggers risk aversion
the "discussion of introducing a representative index" listed as one of the reasons for the plunge at 05:43 shows that the market is wary of long-term structural changes in the short term. the discussion of introducing a 'representative index' such as the S&P500 to the cryptocurrency market appears on the surface to be a positive sign of institutionalization. However, investors interpret this standardization and the introduction of a representative index as eventually leading to increased regulation and greater control over speculative liquidity, which may have accelerated risk aversion in the short term.
III. A closer look at the spot market (based on Upbit KRW): price divergence and liquidity reorganization
A. Bitcoin (BTC): Relative downside rigidity in the KRW market
on Upbit, Bitcoin (BTC) trades at KRW 168,310,000, with a change rate of -0.40%, which is significantly lower than Binance's 24-hour change rate of -1.60%. This price disparity suggests that selling and liquidation pressure from institutional or large traders has been much stronger in the global USD market. the Upbit KRW market is temporarily cushioning the global plunge thanks to relatively robust domestic retail investor buying (or psychological buffer). however, this is only a short-term phenomenon, and it will be interesting to see how long this relative defense lasts, as the continued decline in global markets will eventually affect the domestic market.
B. Ethereum (ETH) and Altcoins: Rebalancing of Institutional Funds and High Volatility
the major altcoins suffered a larger correction than Bitcoin, with Ethereum down -2.85% on Upbit and -4.21% on Binance. This correction has important implications when interpreted in conjunction with the news of 'Institutional Funds Rebalance to ETH'. with Bitcoin failing to break through key resistance levels, institutions are likely taking profits on their Ethereum positions in the short term or reallocating their assets to manage risk. Ethereum is no longer just an altcoin, but an institutional investment asset with its own volatility that moves independently of Bitcoin.
Upbit spot market liquidity by asset class
tokenUpbit Spot Price (KRW)percentage Changemarket Capitalization (Billion)trading Volume (Billion) bitcoin (BTC) 168,310,000 -0.40 321.169 trillion 1,305.701 billion ethereum (ETH) 5,922,000 -2.85 683.565 trillion 43,732.796 billion ripple (XRP) 3,855 -1.08 221.462 trillion 79,636,978.792 billion dogecoin (DOGE) 3,855 -3.37 41.6253 trillion 294,498,400.832 billion
ethereum, Ripple, and Dogecoin dominate the trading volume on Upbit Market. The high trading value of Dogecoin, in particular, indicates that speculative activity around meme coins is still very much alive. this shows that domestic investors are actively looking for trading opportunities in stocks with high price volatility.
C. Inferring Technical Indicators (Technical Analysis)
based on the provided price data (24-hour high/low) and percentage change, you can infer the current status of key technical indicators.
moving Average Lines (MA) and Support Lines:
bitcoin's sharp drop from the 24-hour high of $116,074.3 to the current price of $112,560.5 has significantly increased the likelihood of a downward break below short-term moving average lines (e.g., 7-day and 20-day MAs). bitcoin's failure to break above the $119,500 resistance level means that it has failed to break out of the top of the existing uptrend channel. bitcoin is now in a technically unstable position where it needs to reaffirm strong support in the $110,000 to $112,000 range. failure to defend this area could lead to further selling pressure.
Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) Reasoning:
the RSI, which presumably approached overbought territory during the last bull run, is likely cooling off rapidly due to the current plunge. As an indicator of a near-term trend reversal, the key will be whether the RSI drops completely below the 50-period moving average (neutral) to turn momentum bearish. meanwhile, stocks that have fallen sharply, such as Ethereum (-4.21%) and Litecoin (-4.53%), are likely to have already experienced a dead cross where the MACD line has broken below the signal line, suggesting that a strong short-term sell signal is sounding, which could trigger an exodus of momentum-based traders.
Bollinger Bands (BB) Reasoning:
the current sharp price retracement move is likely to lead to an attempt to break the midline of the Bollinger Bands (20-day moving average) and test the lower band. bitcoin's 24-hour low of $112,121.4 is an important point to check for proximity to the lower band of the BB. if Bitcoin rebounds quickly from this area without breaking the BB lower band, it could be interpreted as a healthy correction, but for now, downside pressure is prevailing.
IV. Derivatives and on-chain flow diagnostics: funding Rate Extremes and Institutional Positions
A. Funding Rate Extremes: Altcoin Short Positions Overheat
the Funding Rate in the futures market is a key indicator of overheated long/short positions, and the market is currently showing extreme divergence between major coins and altcoins.
funding rate and derivatives market interpretation by major coins (based on Binance futures)
coin24h Change Ratefunding Ratemarket Interpretation BTCUSDT -1.60 0.0037 tenuous long dominance (long sentiment remains strong despite price decline) XRPUSDT -xRPUSDT 0.0047 strong long dominance (speculative interest and expectations remain) TRXUSDT -0.0226 -0.0226 extreme short positioning overheating XLMUSDT -0.0230 -0.0230 extreme short position overheating ETCUSDT -0.0072 -0.0072 short position dominance (spot plunge and cascading short bets)
bitcoin and Ripple's funding ratios remain marginally positive (longs pay for shorts), indicating that long-term bullishness on the market's majors is supporting the downside, meaning that even during the recent selloff, there has been limited exodus of longs from these assets.
however, a number of altcoins, such as Tron (TRX) -0.0226% and Stellarumen (XLM) -0.0230%, have very deep negative funding ratios, reflecting strong liquidity risk aversion. this, coupled with the news that Binance is delisting 18 altcoins, means that investors are betting heavily on liquidations and liquidity disruptions in non-major coins.
this overheating of short positions is a double-edged sword. while it signals strong downside pressure, an excessive buildup of short positions increases the likelihood that even a modest rebound in price will force them to be liquidated (short squeeze), providing a structural paradox that could trigger a sharp short-term bounce. for now, liquidity risk aversion prevails and short bets tend to persist.
B. Duality in institutional positions: liquidity favorable and BTC longs missing
1. macroeconomic liquidity environment:
the Fed's official announcement to end quantitative tightening (QT) is a structural favor that will provide massive long-term liquidity to the market. this abundant liquidity environment is also behind the New York stock market's record highs. While the liquidity released by the QT cessation is positive for crypto markets in the long term, in the short term, the technical barrier of Bitcoin's failure to break $120,000 and liquidity risks in altcoins are offsetting this favor. this is likely to create a pattern of "asymmetric liquidity inflows," with funds prioritizing risk management and only absorbing into low regulatory risk, institutionalized ETFs.
2. on-chain shift of institutional funds:
the news of 'missing Bitcoin buying' and 'institutional money reorganizing around ETH' suggests an important on-chain money flow shift. while Bitcoin's price has been stalling, failing to break out of its all-time highs, institutions have been turning to Ethereum, which offers relatively greater growth potential and utility.
however, there are fundamental factors that provide downside rigidity amidst the market's sharp correction. michael Saylor's adherence to a long-term holding strategy of "never sell Bitcoin" and Standard Chartered's statement that "Bitcoin is getting harder to break below $100,000" are strong evidence in support of a structural bottom in the market. Additionally, the news that Trump's inner whale has entered a $430 million long position in Bitcoin and Ethereum can be interpreted as an on-chain flow that shows that current price levels are still viewed as a buying opportunity.
V. Conclusion and Expert Strategy Suggestions: November Outlook and Investment Response
the current cryptocurrency market is likely to remain in a technical correction in the near term. The sharp deterioration in investor sentiment (-0.25) and overheated short positions in altcoins suggest that the selling pressure will not be easily relieved. for the market to stabilize, it is imperative for Bitcoin to firmly defend the $110,000 to $112,000 key support level. Failure to defend this level risks further long position liquidation and a sharp drop.
in the medium term, the market is likely to resume its uptrend on the back of a strong liquidity boost from the Fed's QT halt. the fact that November is a month of historically high average returns for Bitcoin also boosts medium-term expectations.
conditions for a November rally restart:
bitcoin's rapid recapture of $115,000: The price must quickly regain this technical milestone to restore investor sentiment and ease short position pressure.
institutional funds stabilize: The Ethereum-centric portfolio rebalancing needs to stop, and buying via Bitcoin spot ETFs needs to resume.
expert investment strategy suggestions:
manage risk by holding cash: During this period of extreme volatility, it is a priority to increase the cash portion of your portfolio to protect against potential further declines.
capitalizeon core asset split-buy opportunities: If Bitcoin falls to the $110,000 support level, we recommend executing a split-buy strategy for core assets (Bitcoin, Ethereum) based on the structural favorable news of QT stopping and the firm belief of long-term institutional investors.
avoidaltcoin liquidity risk: Despite the possibility of a short squeeze in extreme negative funding ratios such as TRX and XLM, it is prudent to reduce positions or avoid new entries as the liquidity risk from the Binance delisting news is greater.
VII. Final Buy Recommendation Score Summary
the overall market, despite the macro favorable conditions, is subject to corrective pressure in the near term due to the failure to break technical resistance and deteriorating sentiment. Therefore, the approach to investing should be very conservative and focused on risk management.
final Coin (Cryptocurrency) Buy Recommendation Score
timebuy Recommendation Scorereason oct 29, 2025 05:43 -0.25 negative sentiment prevails due to recent short-term retracement and proxy index introduction discussions; slightly negative sentiment reflects historical mixed trends
VIII. Analyzing the New York Stock Market and Macroeconomic Conditions: Bitcoin Divergence in a Bull Market
unlike the cryptocurrency market, the NYSE and macroeconomic environment have maintained strong positive momentum.
A. Background on the New York Stock Market Highs
recently, major indices such as the Dow, S&P 500, and Nasdaq have been on a streak of record highs. this has been driven by strong earnings from companies like Intel, Microsoft, and UPS, as well as strong growth momentum in artificial intelligence (AI)-related tech stocks, particularly Nvidia, as it begins its quest for a $5 trillion valuation. news that Nvidia will build seven supercomputers for the U.S. Department of Energy, among others, is also boosting stocks, reflecting the ongoing demand for AI chips.
B. Impact of the Fed's official announcement to end quantitative tightening (QT)
the biggest macroeconomic variable was the Fed's official announcement of the end of quantitative tightening (QT), which is a long-term favor that will provide massive liquidity to the financial markets, contributing to the record highs in the New York stock market. However, the crypto market was asymmetrical in that despite the news of increased liquidity, it was unable to fully absorb this favor in the short term due to failed technical resistance and altcoin liquidity risks.
C. Stock Market Sentiment Analysis
the stock market's buy recommendation score remains high in contrast to the crypto market. as of 05:43, the stock market's buy recommendation score is 2.7, indicating strong positive momentum, including AI chip launches and strong financial sector earnings, which makes the stock market more attractive overall. the strength of equity markets is based on clear fundamentals of liquidity supply and corporate earnings, which have maintained a stable positive sentiment, unlike crypto markets, which are prone to short-term volatility.
stock Market Buy Recommendation Score Change (2025-10-29 Dawn)
hourbuy Recommendation Scorereason 2025-10-29 03:46 2.21 intel, MS-UPS and others in strong upward momentum, but overall buying opportunities remain despite some layoff news intel, MS-UPS 2025-10-29 04:46 3.21 dow, S&P500, Nasdaq set back-to-back record highs, Big Tech earnings expected, bull market continues despite some negative events 2025-10-29 05:43 2.7 Positive momentum, including AI chip launches, strong financial sector earnings, Dow, Nasdaq at record highs, overall buying appeal high
the fact that the stock market maintained a high score of 2.7 even as crypto markets plunged, hitting -0.25, is a clear indication that liquidity is currently being channeled into lower-risk institutional assets. investors may want to consider a strategy of shifting a portion of their portfolio to the stable tech sector of the stock market to counteract the volatility of bitcoin and altcoins in the short term.