Analysis on the sustainability of the crypto market rebound after Powell's speech
Core Conclusion
Powell's dovish speech on October 14th provided short-term support for the crypto market, with BTC and ETH rebounding from their lows to $115,222 and $4,246, respectively. This rebound was supported by moderately strong fundamentals : net outflows from exchanges (BTC -0.55%, ETH -1.89%), stablecoin supply growth of +2.53 billion (+1.62%), and DeFi TVL recovering +8.1% from its low. However, technical indicators on the daily chart remain bearish, with short-term resistance at $113,000 (BTC) and $4,200 (ETH). Sustainability assessment: There is a 70% probability of consolidation in the short term (1-3 days), requiring a break above key resistance levels and confirmation from macroeconomic data in the medium term .
Interpretation of Powell's speech and market expectations
Core content of the speech
On October 14th, Powell delivered a speech titled "Understanding the Federal Reserve's Balance Sheet" at the National Association for Business Economics (NABE) annual meeting, striking a dovish yet cautious tone . He emphasized rising downside risks to employment (unemployment is low but job creation is slowing), while also arguing that the 2.9% increase in core PCE inflation was primarily driven by tariffs and was temporary. Key signals suggest that quantitative tightening (QT) may end in the coming months, with current reserves of approximately $3 trillion approaching "just above ample" levels. (Reuters)
Interest rate cut expectations and market pricing
| Meeting Time | Probability of interest rate cut | Expected range | Market impact |
|---|---|---|---|
| October 28-29 | 97-100% | 25bp | The federal funds rate is lowered to 3.75%-4.00%. |
| December 17-18 | 88-90% | 25bp | Cumulative interest rate cuts of 50bp in Q4 |
The CME FedWatch tool shows that the market has fully priced in two rate cuts, and expectations have not changed significantly after Powell's speech, reflecting his balanced stance of "meeting-by - meeting decision-making."
Immediate market reaction
Panic sell-off before speech :
- BTC fell 3.3% to $110,593, while ETH fell 4% to $4,012.
- All nine major cryptocurrencies fell, with market capitalization falling below $4 trillion.
- Whale short XRP, DOGE and other assets increase volatility
Mild rebound after speech :
- BTC closed at $115,222 (+0.03%), while ETH rose to $4,246 (+2.1%).
- Moderate increase in transaction volume (BTC $68.9B, ETH $46.4B)
- Market digests dovish signals but no strong buying
Next day callback :
- On October 15th, BTC fell to $113,157 (-1.8%) and ETH to $4,129 (-2.8%).
- Reflecting market doubts about sustainability, Asian stock markets weakened, putting pressure on Yahoo!
Technical analysis: key points and momentum assessment
Bitcoin Technical Structure
| Technical indicators | 1H | 4H | 1D | Signal strength |
|---|---|---|---|---|
| Price Position | $112,389 | $112,389 | $112,389 | Below the 50/200 day moving average |
| RSI(14) | 46 (neutral) | 42 (oversold) | 43 (short) | 🟡 No extremes seen |
| MACD | Hist +29 (Bullish Crossover) | Hist +107 (bullish divergence) | Hist -997 (bearish) | 🟡 Short-term strength but daily weakness |
| Key support | $111,146 | $110,326 (strong support) | $107,257 | Bollinger lower band + historical low |
| Key resistance | $113,416 | $113,000 | $115,775 | EMA12/middle track/upward trend line |
Volume characteristics : Trading volume surges during the plunge (driven by liquidations) and weakens during the rebound, indicating consolidation rather than a trend reversal. The OBV (on-balance volume) is +50,161 (accumulation) on the 1-day basis but -42,115 (peak-distribution) on the 1-hour basis, reflecting caution amid intraday fluctuations.
Ethereum Technical Structure
| Technical indicators | 1H | 4H | 1D | Signal strength |
|---|---|---|---|---|
| Price Position | $4,113 | $4,113 | $4,113 | Testing ascending triangle support |
| RSI(14) | 53 (neutral) | 51 (neutral) | 46 (short) | 🟢 Short-term momentum improving |
| MACD | Hist +4 (bullish) | Hist +13 (bullish crossover) | Hist -26 (bearish) | 🟡 Short-term strength but daily chart awaits confirmation |
| Key support | $3,974 | $4,000 | $3,150 | Bollinger lower band + psychological barrier |
| Key resistance | $4,200 | $4,195 | $4,339 | 50-day moving average + upper edge of the triangle |
Exchange liquidity : Exchange supply fell to a 9-year low, with a net outflow of 209k ETH (about $840 million) from October 10-14. Increased HODLing behavior provided support for prices.
Futures Market Signals
| assets | Open Interest (OI) | 24H changes | Funding Rate | Leverage Risk |
|---|---|---|---|---|
| BTC | $72.9B | -0.1% | +0.004% (long position paid) | 🟡 Medium, stabilizing after position clearing |
| ETH | $47.3B | +1.54% | +0.006% (long position paid) | 🟢 New long positions established, showing confidence |
The positive funding rate indicates that longs are more willing than shorts, but the decline in BTC's OI reflects the cooling of leverage after the liquidation on October 10-11, while the rise in ETH's OI shows that new funds have entered the market during the rebound.
On-chain data: accumulation signals and liquidity assessment
Exchange Fund Flow (bullish signal)
Bitcoin net outflow details :
- Total holdings on October 10: 1,770,354 BTC
- Total holdings on October 15: 1,760,595 BTC
- Net outflow: 9,759 BTC (-0.55%, approximately $1.1 billion)
- Major outflow sources: Binance - 7,113 BTC, Coinbase - 4,023 BTC
Ethereum net outflow details :
- Total holdings on October 10: 10,159,999 ETH
- Total holdings on October 15: 9,968,270 ETH
- Net outflow: 191,729 ETH (-1.89%, approximately $790 million)
- Main outflow sources: Coinbase - 197,939 ETH, OKX - 41,008 ETH
Interpretation : Sustained net outflows reduce the available supply on exchanges, which historically correlates highly with price bottoms/rallies and is a typical bullish signal. Users transferring assets to cold wallets indicate a growing willingness to hold them long-term.
DeFi ecosystem recovery
Ethereum chain TVL fluctuations :
- October 10: $93.07B
- October 11th: $83.08B ( -10.7% plunge , peak liquidation)
- October 15th: $88.81B ( +8.1% rebound from low )
- Net change: -4.6%, but off panic lows
Main protocol performance :
| protocol | TVL on October 10 | Low TVL | TVL on October 15th | Recovery range | Activity |
|---|---|---|---|---|---|
| Aave | $43.38B | $37.53B | $41.11B | +9.5% | Borrowing demand picks up |
| Uniswap | $6.66B | $5.89B | $6.42B | +9.0% | Trading volume recovery |
| Compound | $2.98B | $2.57B | $2.76B | +7.8% | Steady rebound |
The recovery of protocol activity (especially the nearly 10% rebound of Aave and Uniswap) indicates real growth in on-chain economic activity, rather than pure speculation, providing fundamental support for the rebound.
Stablecoin liquidity injection
Supply Growth (Ethereum Mainnet) :
- USDT: 96.77B on October 10 → 98.76B on October 15 ( +1.99B, +2.05% )
- USDC: 48.18B on October 10th → 48.72B on October 15th ( +0.54B, +1.12% )
- A total of approximately US$2.53 billion in new liquidity was added
Whale behavior :
- USDT whale have accumulated a net of ~3.4M USDT, with large inflows early on (+12.9M on October 10-11) supporting liquidity during the rebound.
- USDC whale have accumulated ~0.5M USDC, similar pattern
The issuance of additional stablecoins usually indicates the entry of new capital, providing ammunition for BTC/ETH spot trading and DeFi activities, and is a leading bullish indicator.
Social Sentiment and Market Narratives
Community Interpretation of Fed Policy
The crypto community generally interpreted Powell's speech as "super positive" , with the main narrative focusing on:
- End of QT = Return of liquidity : The end of balance sheet reduction means increased market liquidity, which is historically beneficial to risky assets
- Interest rate cut cycle confirmed : Two interest rate cuts in Q4 will reduce holding costs and drive capital rotation from traditional assets (such as gold) to high-growth targets
- Inflation hedging narrative strengthens : Tariff-induced inflation concerns increase Bitcoin's appeal as a hedge x.com x.com
Traders and analysts disagree
Optimistic view :
- Support holds + Fed easing = Q4 parabolic growth potential
- BTC target $125K-$131.5K (October historical seasonal pattern)
- The structural bullish logic is intact, and the pullback is an opportunity to increase positions x.com x.com
Cautious concerns :
- A quick pullback after the initial rally reveals fragility
- It will take time to recover after heavy liquidation (totaling $19B)
- External shocks (Trump's tariff proposals, government shutdown data delays) increase uncertainty
- Need to wait for CPI and non-farm payroll data to confirm the macro environment x.com x.com
Key risk factors
| Risk Type | Specific content | Impact |
|---|---|---|
| Policy uncertainty | Persistent inflation or escalating tariffs could delay rate cuts | 🔴 High |
| Data window period | Government shutdown delays September jobs data until after October 24 | 🟡 Medium |
| Technical selling pressure | A large number of leveraged longs face stop-loss risks at resistance levels | 🟡 Medium |
| Exchange manipulation | Community discussion on suspected liquidation manipulation | 🟢 Low (unconfirmed) |
Twitter sentiment is generally optimistic (approximately 60% bullish vs. 40% bearish), but trading volume is lower than expected, reflecting a strong wait-and - see attitude.
Comprehensive Sustainability Assessment
Positive factors supporting the rebound
✅ Healthy on-chain fundamentals :
- Net outflow from exchanges (BTC -0.55%, ETH -1.89%) reduced selling pressure
- Stablecoin supply growth of +2.53B provides liquidity ammunition
- DeFi TVL rebounds +8.1% from panic lows, showing real demand
✅Macro policy support :
- Expectations of a Fed rate cut are high (97% probability of an October rate cut)
- QT is about to end and release long-term liquidity
- Tariff inflation is characterized as temporary, reducing the risk of a hawkish policy shift
✅Short -term improvement in technical aspects :
- 1H/4H MACD shows bullish crossover
- Key support levels hold (BTC $110K, ETH $4,000)
- RSI has not entered the overbought zone and has room to rise
Constraints and risks
⚠️Technical daily chart is bearish :
- The daily MACD is still negative and the trend reversal has not been confirmed.
- The price is trapped below the major moving averages (50/200 day moving averages)
- Insufficient rebound volume and lack of breakthrough momentum
⚠️External uncertainty :
- Key economic data delayed until late October
- Tariff policy may trigger secondary fluctuations
- Weakness in Asian markets drags down risk assets
⚠️Residual leverage risk :
- Long Funding Rates Remain Positive Despite Liquidations (Overly Optimistic)
- Programmatic stop-loss may be triggered near the resistance level
Scenario Analysis
Bullish scenario (40% probability) :
- Trigger conditions: BTC breaks through $113.4K, ETH breaks through $4,200, and the October FOMC confirms a rate cut
- Target: BTC $120K-$125K, ETH $4,500-$4,800
- Time frame: Before the end of October
Neutral scenario (50% probability) :
- Maintaining range fluctuations: BTC $110K-$115K, ETH $4,000-$4,300
- Waiting for data catalyst: CPI and non-farm payroll data after October 24
- Duration: 1-2 weeks
Bearish scenario (10% probability) :
- Trigger conditions: Breaking below key support of $110K (BTC)/$4,000 (ETH), unexpected deterioration in macro data
- Target: BTC $107K, ETH $3,900
- Risk sources: hawkish policy or external shocks
in conclusion
Powell's dovish speech provided short-term support for crypto market sentiment and liquidity expectations , and the rebound has some fundamental basis (exchange outflows, increased stablecoin issuance, and a DeFi recovery). However, technical analysis suggests the rebound is a correction rather than a trend reversal , with daily indicators still bearish and facing resistance from moving averages.
Sustainability judgment :
- Short-term (1-3 days) : 70% probability of consolidation in the $110K-$115K (BTC) / $4,000-$4,200 (ETH) range
- Medium-term (1-2 weeks) : The rebound needs to break through the $113.4K/$4,200 resistance and be confirmed by macroeconomic data in late October.
- Long-term (Q4) : The Fed's rate cut cycle and the end of QT are structurally positive, but we must be vigilant against policy changes and external shocks.
Trading strategy recommendations :
- Conservative: Wait and see, waiting for technical confirmation of breakthrough or macroeconomic data catalyst
- Aggressive: Build positions in batches around $110K/$4,000, with stop-loss set 2-3% below support.
- Key indicators to monitor: FOMC decision on October 28-29, economic data after October 24, and a breakout of the $113.4K/$4,200 resistance level.