Key Takeaways
- • Spot bitcoin ETFs recorded cumulative net outflows of more than $260 million as of October 14, with no significant inflows during the week, according to StoneX analyst Julian Pineda.
- • The 10-year U.S. Treasury yield retreated toward 5.0% from near 5.3%, and the DXY dollar index moved back toward 101, yet crypto failed to capture capital rotating away from these competing markets.
- • Bitcoin's correlation with gold remains positive over the last 25 trading sessions, suggesting BTC is losing appeal both as a risk asset and as an alternative investment.
- • Short-term crypto volatility has compressed well below one-month, three-month and twelve-month averages, reflecting lower market activity and declining investor interest.
- • The Fear & Greed Index sits near 50, a neutral reading not seen for several weeks, signaling a loss of momentum in sentiment.
Summary
As the second half of October began, StoneX's crypto outlook described a growing sense of caution across the cryptocurrency market, with demand struggling to regain momentum and confidence in the sector's largest assets remaining in a persistent neutral phase. According to the analysis, the market's weakness has persisted even as competing markets have lost some appeal, pointing to a loss of momentum that is internal to crypto rather than purely a function of macroeconomic developments.
The week saw a shift in markets that typically compete with crypto for capital. Comments from Federal Reserve members moderated expectations of further near-term rate hikes, pushing 10-year U.S. Treasury yields down toward the 5.0% area after trading close to 5.3%. The DXY dollar index also lost momentum and moved back toward the 101-point level. However, StoneX noted that crypto did not capitalize on these conditions. Spot bitcoin ETF flows showed limited activity, with no particularly significant inflows during the week and cumulative net outflows of more than $260 million as of October 14.
The analysis also highlighted a closer relationship between bitcoin and gold, with the correlation coefficient remaining positive over the last 25 trading sessions. StoneX, citing TradingView and TVC data, said this alignment could indicate that bitcoin is losing attractiveness both as a risk asset and as an alternative investment, while gold has similarly struggled to attract strong demand. Correlation coefficients can change over time, the firm cautioned.
Volatility has also contracted. Over the last week, much of the cryptocurrency market recorded substantially smaller price moves than over one-, three- and twelve-month horizons, which StoneX interpreted as evidence of lower market activity and declining short-term investor interest.
Sentiment indicators point the same way. The Fear & Greed Index, per CoinMarketCap, was around 50, returning to a neutral zone not seen for several weeks and signaling a slowdown from earlier enthusiasm. StoneX warned that if confidence continues to struggle, it could further limit crypto's ability to sustain demand, and that a phase of indecision and moderate weakness could persist in the near term. The report was written by Julian Pineda, CFA, CMT, Market Analyst at StoneX.
The week saw a shift in markets that typically compete with crypto for capital. Comments from Federal Reserve members moderated expectations of further near-term rate hikes, pushing 10-year U.S. Treasury yields down toward the 5.0% area after trading close to 5.3%. The DXY dollar index also lost momentum and moved back toward the 101-point level. However, StoneX noted that crypto did not capitalize on these conditions. Spot bitcoin ETF flows showed limited activity, with no particularly significant inflows during the week and cumulative net outflows of more than $260 million as of October 14.
The analysis also highlighted a closer relationship between bitcoin and gold, with the correlation coefficient remaining positive over the last 25 trading sessions. StoneX, citing TradingView and TVC data, said this alignment could indicate that bitcoin is losing attractiveness both as a risk asset and as an alternative investment, while gold has similarly struggled to attract strong demand. Correlation coefficients can change over time, the firm cautioned.
Volatility has also contracted. Over the last week, much of the cryptocurrency market recorded substantially smaller price moves than over one-, three- and twelve-month horizons, which StoneX interpreted as evidence of lower market activity and declining short-term investor interest.
Sentiment indicators point the same way. The Fear & Greed Index, per CoinMarketCap, was around 50, returning to a neutral zone not seen for several weeks and signaling a slowdown from earlier enthusiasm. StoneX warned that if confidence continues to struggle, it could further limit crypto's ability to sustain demand, and that a phase of indecision and moderate weakness could persist in the near term. The report was written by Julian Pineda, CFA, CMT, Market Analyst at StoneX.
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