Market sentiment is at a delicate turning point this week. The unexpectedly weak September nonfarm payrolls report has completely reshaped expectations for the Fed’s rate-hike path, quickly shifting the macro narrative from “tightening fears” to “wait-and-see and positioning.” However, this easing in the macro backdrop has not translated directly into strong buying in risk assets. Instead, uncertainty ahead of the FOMC meeting minutes has left the market in a cautious holding pattern. Bitcoin’s repeated tussle around the $86,000 level and Ethereum’s choppy trading ahead of a key upgrade clearly reveal the market’s current lack of a decisive directional catalyst. Capital is not pouring in on a broad scale; instead, flows are showing a clear structural divergence, rotating away from purely speculative Meme tokens and toward DeFi blue chips with tangible yield mechanisms and core blockchain infrastructure. This shift in capital flows signals that the market is moving beyond an emotion-driven broad rally and into a phase of more nuanced pricing shaped by fundamental screening and macro events.

Looking at the specific facts on macroeconomic data and capital flows, U.S. nonfarm payrolls increased by just 29,000 in September, well below expectations of 84,000. The unemployment rate rose to 4.2%, and figures for the previous two months were revised down by a combined 60,000. This downside surprise caused the CME FedWatch tool’s probability of a rate hike in October to plunge to 18%, from around 70% a week earlier. Fed official Williams also said the Fed was “in no hurry to act,” further reinforcing the market consensus that rates would remain unchanged in October. Although expectations of a rate hike in December remain, near-term pressure has eased considerably. However, the 10-year U.S. Treasury yield remains elevated at 5.25%, while the 30-year yield has reached 5.69%. This high-interest-rate environment remains a key factor weighing on risk-asset valuations. On the capital-flow front, U.S. spot Bitcoin ETFs have recorded net inflows for a third consecutive week, bringing cumulative net inflows to $57.8 billion. However, last week’s net inflows totaled just $241 million, down around 90% from $2.39 billion the previous week, indicating a sharp decline in marginal buying momentum. Meanwhile, Ethereum ETFs saw $138 million in net outflows, highlighting a clear divergence in flows between major cryptocurrencies. On-chain data shows that Bitcoin balances on exchanges have fallen to around 2.68 million BTC, their lowest level since September 2023. Whale wallets holding 10 to 10,000 BTC accumulated 41,025 BTC over the past 10 days, bringing their total holdings back up to 13.64 million BTC, or 67.93% of the circulating supply. This contraction in supply provides structural support over the medium term, but has not yet translated into an immediate price breakout.

The market’s key areas of contention currently center on two event-driven factors: Ethereum’s Glamsterdam upgrade and the upcoming release of the FOMC meeting minutes. Ethereum’s Glamsterdam upgrade was activated on the Sepolia testnet on the evening of October 6 Beijing time. It integrates the execution and consensus layers and introduces built-in PBS and gas-pricing adjustments, with the mainnet launch expected in the fourth quarter. This technical progress provides long-term narrative support for Ethereum. ETH is currently fluctuating around $2,717 and testing the $2,735–$2,745 resistance zone. Although the testnet’s successful activation validates the feasibility of the technical approach, its direct impact on prices in the short term is limited. The market is more focused on actual performance improvements and ecosystem responses after the mainnet launch. Meanwhile, the FOMC meeting minutes, due at 2:00 a.m. Beijing time on October 8, are this week’s biggest macro variable. The market will closely examine the wording on persistent inflation and the interest-rate path, particularly whether hawkish dissent has softened. QCP Group says that under its base-case scenario, Bitcoin will consolidate in the $84,000–$87,000 range; if the minutes are hawkish, it could test lower support levels. In addition, the altcoin market is showing clear signs of a deflation of speculative excess: meme coins have fallen to around 3% of total altcoin market capitalization, a record low, while capital is flowing increasingly quickly toward DeFi leaders with real-world business traction. AAVE is up around 20% for the week, with V4 deposits exceeding $1 billion and support expanded to the Base network for tokenized U.S. stocks as collateral. SKY is up 14% for the week; Galaxy Digital deposited $100 million in sUSDS into its treasury and purchased SKY. These fundamentally driven gains contrast sharply with the volatility of purely speculative tokens such as NIGHT and PUMP, signaling a shift in capital away from high-risk speculation toward assets backed by cash flow.

The key to the market’s next moves and trading strategy is balancing macro uncertainty against structural support on-chain. Bitcoin is currently trading within a core range of $83,000–$87,200, with $87,200 as a key resistance level. If it breaks above that level on strong volume after the FOMC minutes are released, the next target could be $90,000. On the downside, support levels to watch are $85,000 and $83,000. Analysts note that if Bitcoin retreats to the lower boundary of the $82,500 channel and whales are accumulating, this could be a confirmation signal to buy the dip, with the next rebound target at $87,000. However, the market’s direction remains unclear ahead of the October 8 release of the FOMC minutes, making large bets on a single direction extremely risky. If the minutes are hawkish, rate-hike expectations could rise again, weighing on risk-asset valuations; if they are neutral or dovish, macro pressure may ease, helping Bitcoin challenge overhead resistance. While dwindling on-chain supply is the strongest mid-term support, declining exchange balances do not necessarily signal an imminent price rise: cold wallets, OTC trades, and flows to custodians can all produce similar patterns. Therefore, the focus of trading at this stage should be on combining position management with an event-driven strategy. Before the FOMC minutes are released, keep positions light or stay on the sidelines to avoid being swayed by short-term macro noise. Following the successful Ethereum testnet upgrade, watch for ETH to stabilize in the $2,650–$2,750 range, while remaining mindful of the limited price impact of a testnet upgrade. Overall, the market is shifting from sentiment-driven premiums to fundamentals-based pricing. Investors should set aside short-term strategies of chasing rallies and selling dips, focus on core assets with real business growth, cash-flow support, and institutional backing, and closely monitor changes in macro policy signals to prepare for potential market volatility.

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