At the end of October 2025, the cryptocurrency market experienced an unexpected drop that shocked many traders who were anticipating growth due to a series of favorable news. Experts from the analytical company CryptoQuant shared their insights on the reasons behind this trend and possible future scenarios for the market.
This is reported by Finway
Positive Factors Did Not Shield the Market from Decline
Among the positive news that seemingly should have supported the market, analysts highlighted the decision by the U.S. Federal Reserve to lower the interest rate by 0.25% — to 3.75–4%, as well as the conclusion of the quantitative tightening (QT) program. Additionally, the U.S. and China reached an agreement on a “trade truce,” and the last two rate changes indicated a possible shift in monetary policy. An additional boost came from the approval of ETFs for altcoin staking.
However, despite these positive signals, prices for Bitcoin and key U.S. stock indices began to decline. Experts cite the main reason as a waning interest from institutional investors. This is evidenced by the negative premium on Coinbase — the difference between cryptocurrency prices on this exchange and the average market rate. Such a situation typically indicates a decrease in institutional demand in the U.S., even amidst a positive news backdrop.
The Impact of Macroeconomics and Geopolitics
A historically similar dynamic preceded local corrections, where retail traders react actively to news while larger players act more cautiously. The current situation has been significantly influenced by statements from Federal Reserve Chair Jerome Powell. Despite the conclusion of QT on December 1, which is formally expected to halt the “liquidity drain,” Powell noted that a rate cut in December is not guaranteed. This added uncertainty and restrained the market from growth.
Geopolitical tension also remains significant. Although the U.S. and China publicly announced successful negotiations, experts from CryptoQuant emphasize that this is merely a “temporary truce.” Additional tension arises from China’s statements regarding dissatisfaction with potential interference in Taiwan issues, as well as reports of renewed nuclear testing in the U.S. All of this raises the overall level of uncertainty in the market.
The only positive amidst the negative trends was the Nikkei index, which reached a historical high due to the stable monetary policy of the Bank of Japan and the resilient yen. However, this factor could not offset the pessimism emanating from the U.S.
“Essentially, the sell-off was not irrational. After several weeks of euphoria, the speculative momentum cooled. Institutional demand weakened, monetary clarity became blurred, and geopolitics complicated. Nevertheless, the medium-term outlook remains favorable: liquidity is likely to improve after the conclusion of QT, and risk appetite may recover in early 2026 — provided that other factors do not interfere,” concluded CryptoQuant.
Previously, analysts also noted that investors remain skeptical about a recovery of the bullish trend, despite the rise in Bitcoin.