The information, opinions, and judgments regarding markets, projects, and currencies mentioned in this report are for reference only and do not constitute any investment advice.Written by  0xBrooker

The progress of the US-China tariff conflict remains the biggest variable affecting major global financial markets. Although there has been some easing this week, whether there will be real progress depends on the upcoming negotiations between the two delegations. The key medium-term juncture is whether the leaders of the two countries can meet as scheduled during the APEC summit in South Korea.

The Federal Reserve's continued dovish stance, coupled with the sluggish US job market, has led to market expectations that two 50-basis-point rate cuts this year have been fully priced in. This provides underlying support for risk assets.

Aside from the US-China tariff conflict and the Fed's dovish stance, BTC remains hampered by its own internal market structure. On one hand, the contract market has lost over $20 billion in notional value, making it difficult to gather strength in the short term; on the other hand, the cyclical nature of the market, coupled with persistent selling by long positions, makes it difficult for the market to stabilize and rebound due to insufficient funds.

Comparison of BTC price movements across different cycles

Another key point to watch is that US AI and tech stocks will begin their Q3 earnings season next week, and whether their performance meets expectations will have a significant impact on the financial markets.

The main factor influencing the US stock market recently has been the various pronouncements surrounding the US-China trade war. Following last week's series of major countermeasures, both sides released some moderate statements this week to ease market sentiment. The US, in particular, has seen President Trump and the Treasury Secretary express conciliatory sentiments on various occasions —high tariffs are unsustainable; US-China relations remain good; the US is unwilling to decouple from China economically, and believes China shares this view. In contrast, China's response has been more subdued—attributing the "global panic" to US rhetoric and actions towards China; emphasizing that export controls are necessary for national security and industrial policy.

According to media reports, the two delegations are about to begin another round of contacts and negotiations. South Korea has confirmed that the US president will visit South Korea at the end of the month during APEC. Of course, whether the leaders of the US and China can hold a meeting as scheduled during this period still depends on whether the upcoming round of negotiations between the two delegations can make progress.

Benefiting from the easing of the tariff war, US stocks, currently in a data lull, have temporarily stabilized, with the Nasdaq rising 2.14% for the week. The US dollar index, nearing the 100 mark, turned down 0.3%, closing at 98.547. However, risk appetite has not truly improved, with inflows of funds pushing the 10-year US Treasury yield down 2.53% for the week, closing at 4.015%. Gold, on the other hand, experienced a FOMO-driven rally, surging 5.76% this week.

Due to the US government shutdown, the release of several economic and employment data points was delayed. At the Philadelphia conference, Federal Reserve Chairman Jerome Powell emphasized that "the risk of weakening employment is more concerning" and mentioned the possibility of a conditional end to quantitative tightening. The overall tone was cautiously dovish, leaving room for further rate cuts. FedWatch has already fully priced in rate cuts in October and December of this year, totaling 50 basis points.

In the US stock market, major banks reported better-than-expected earnings, but two regional banks were reported to have over $50 million in bad debts, triggering market panic. Starting next week, AI and tech stocks, which influence market direction, will enter their Q3 earnings season. Better-than-expected results may provide some support to the volatile market, but lower-than-expected results will likely push the market downwards.

Last week's report mentioned that BTC and the crypto market are currently under the dual influence of the US-China trade war and the cyclical curse. The combined effect of these two factors has prevented BTC from recovering its losses along with the Nasdaq, instead causing it to continue its downward trend, falling another 5.55% this week on top of a 6.84% drop last week.

BTC Daily Chart

Technically, the price of BTC has fallen into the "Trump bottom" range ($90,000-$110,000), a range that has served as resistance/support for BTC for nearly a year since Trump's election in 2024. Furthermore, BTC has also briefly broken below the 200-day moving average of $107,500, technically placing it at a bull-bear dividing line.

Although the price of BTC has fallen below the 200-day moving average multiple times during this bull market, perhaps this time will be different? According to the BTC cycle, BTC has entered a topping-out phase in terms of time. It's worth noting that long-term holders, who are most affected by the cycle, are accelerating their selling, putting a strain on a market with weakening capital inflows.

According to eMerge Engine statistics, the total sell-off volume of long and short arm contracts this week was 149,496 contracts, lower than last week, with the long arm contract group selling 19,978 contracts, significantly higher than last week.

Weekly statistics on long-term sell-offs and changes in stock on centralized exchanges.

Long-term investors are traditional BTC cycle believers, and their selling has a profound impact on the market, being the most important force shaping previous cycle tops. Their continued selling may be dominated by the cycle "curse," and breaking the old cycle to form a new one would require the intervention of greater structural forces (such as DATs companies and BTC Spot ETF channel funds).

In terms of capital inflows, the scale declined again this week on top of last week's decrease, with the BTC Spot ETF experiencing an outflow of nearly $1.2 billion. The withdrawal of short-term funds from ETF channels due to the US-China trade war is another major reason for the rapid and sustained decline in BTC prices, in addition to long-term selling.

Crypto Market Fund Flow Statistics (Weekly)

Furthermore, after a sharp decline last week, the volume of new open interest in the futures market continued to fall this week, with fees even dropping into negative territory at one point. This indicates that the bullish forces in the futures market are unlikely to regroup and fight again in the short term after such a large-scale sell-off.

From the perspectives of technical analysis, long-term selling pressure, capital inflows and outflows, and contract market structure, BTC is currently under significant price pressure. Unless there is a significant improvement in the US-China trade war that reverses market sentiment, a short- to medium-term reversal is unlikely. Coupled with the influence of cyclical patterns, we believe long-term investors should focus their trading strategies around the end of a cycle. As stated in our September report, the end of an old cycle and the beginning of a new one is a probabilistic event, not impossible, but it is not currently considered a high-probability event.

According to eMerge Engine, the EMC BTC Cycle Metrics is 0, indicating a transition period.

EMC Labs was founded in April 2023 by crypto asset investors and data scientists. Focusing on blockchain industry research and cryptocurrency secondary market investment, EMC Labs leverages industry foresight , insights, and data mining as its core competencies. It is committed to participating in the booming blockchain industry through research and investment, driving the benefits of blockchain and crypto assets to humanity.

For more information, please visit: https://www.emc.fund