Market Commentary

A WEEK WITHOUT THE FED, AWAITING OCTOBER 28

The week unfolded within the Fed's blackout period, which runs from October 17 to October 29: no remarks from its members, and all eyes on the October 28 decision. Positioning moved in a clear direction. After September's weak jobs report (only 29,000 new positions and a 4.2% unemployment rate) and despite the prior week's hot inflation, the market moved to price with strong conviction that the Fed will hold rates on October 28: prediction platforms assigned close to 91.5% to "no change," pointing to the December 9 meeting as the most likely timing for the next hike (though the odds for that date vary widely by source).

The week's one relevant data point reinforced that read of an orderly landing rather than a recession: weekly jobless claims fell to about 194,000, a three-month low and near the lowest levels since the 1960s. A labor market cooling in job creation but not in layoffs gives the Fed room to keep its restrictive bias without urgency to hike again in October. For Digital Assets, the base case — a pause on the 28th with the door open to December — is the most benign of those on the table.

OIL WON'T EASE: BRENT AT FIVE-MONTH HIGHS

On the energy front, pressure intensified. Brent climbed to roughly USD 114 a barrel, its highest since May 4; U.S. WTI cleared USD 100. Friday's trigger was Houthi attacks on Saudi energy infrastructure — the Red Sea port of Yanbu, an oil field and an airport — compounded by Aramco's order to evacuate its Dhahran headquarters. The Strait of Hormuz remains the backdrop: Iran's Revolutionary Guard claimed to have hit or mined seven more vessels, a figure President Trump publicly disputed, while the U.S. blockade keeps Iranian seaborne exports close to zero. One qualification matters: flows through the strait have recovered to near pre-conflict levels, though at very high freight costs, and Saudi Arabia more than tripled shipments through its East-West pipeline, which bypasses Hormuz, from 2 to 7 million barrels a day. The risk is less about transit now than about the integrity of Saudi infrastructure. The implication for the investor is unchanged: expensive crude keeps energy-driven inflationary pressure alive just when the Fed needs the opposite.

THE STRUCTURAL BACKDROP: A RECORD YEAR FOR ETFs

Beyond the week, a context note Eric Balchunas (Bloomberg Intelligence) shared is worth flagging: 2026 is a record year of inflows for the U.S. ETF industry — already past last year's record — while equity mutual funds steadily lose capital. The message is structural: the ETF vehicle is cementing itself as the preferred rail for investment, and Digital Asset ETFs are the channel through which that institutional capital accesses BTC, ETH and SOL. Weekly flows fluctuate; the vehicle's adoption trend does not.

REGULATION: STABLECOINS, UNDER BANK-LIKE SUPERVISION

The week's most relevant regulatory development came on Wednesday: the OCC (The Office of the Comptroller of the Currency, the U.S. federal banking regulator) finalized the first rule implementing the GENIUS Act, the stablecoin law. The rule, effective January 18, 2027, places payment stablecoin issuers under supervision equivalent to a bank's: standards for reserves, redemption, capital, custody and audits, with periodic reserve-composition reporting. The final text also brought an actionable shift: the OCC dropped the presumption that treated third-party reward programs — paid mainly by exchanges — as prohibited yield, keeping only the bar on the issuer paying direct interest; for a client holding stablecoin balances, this decides whether those reward programs remain viable under the federal regime. Stablecoins are the dollar settlement layer on which much of the Digital Assets market operates, so giving them a clear federal framework reduces regulatory uncertainty and reinforces the industry's institutional rails. It did not move price this week — AML and sanctions are left to a later Treasury rulemaking — but it is a structurally favorable foundation over the medium term.

Bitcoin (BTC): Trades at USD 80,850 (-1.0% versus the prior Friday's reference). The weekly path tells the story: BTC started Monday near USD 82,800, lifted by the strong ETF inflow, and rose to a high of USD 84,820 Wednesday, stopping less than USD 200 short of USD 85,000 before turning. From there it gave ground, with Thursday's shift in mood, back to the USD 80,850 area. Despite the drop, BTC again showed relative resilience: its dominance — Bitcoin's weight within the total value of the Digital Assets market — stood at ~57.8% (CoinGecko). What matters in the path is that the USD 85,000 level was already tested this week and rejected the advance; reclaiming and holding it remains the condition for regaining momentum. Below, the USD 80,000 zone remains the floor the market defends. Support at USD 80,000 and USD 78,000; resistance at USD 84,820 and USD 85,000.

Ethereum (ETH): Trades at USD 2,370 (-2.1%), with a path between ~USD 2,360 and ~USD 2,490. ETH remains the laggard: it trades below its short-term moving averages, and its ETFs strung together a fourth week of outflows. The USD 2,400 psychological level was the line the price repeatedly defended and reclaimed; below, USD 2,300 is the structural support that has held in October. Support at USD 2,300–2,360; resistance at USD 2,450–2,490.

Solana (SOL): Trades at USD 102.5 (-1.4%), holding above the USD 100 psychological level after testing it last week. It touched ~USD 108 midweek before pulling back with the rest of the market. Its ETF flow stayed negative for a third straight week, but the magnitude was moderate. USD 100 remains the line in the sand: as long as it holds, the underlying trend is not compromised. Support at USD 100; resistance at USD 108.

The week's microstructure explains why the rebound didn't hold. Wednesday's rally was driven by leverage, not spot: Bitcoin open interest (the total value of open leveraged bets) jumped 8.04% in 24 hours to roughly USD 27,120MM. An advance built on leverage is fragile by definition: it takes only an adverse catalyst for positions to close in cascade. That catalyst arrived Thursday with the tech pullback: over the following 24 hours, USD 458MM was liquidated, of which USD 418MM — 91.2% — were long positions (bullish bets that close automatically when price falls). The breakdown by asset confirms it: BTC accounted for USD 141MM, 96.6% of it on the long side, and ETH USD 93MM. It should not be over-read: funding rates held steady around +0.004%, with no sign of a broad crowding on the long side.

The pattern repeats: leverage amplifies moves in both directions, and this week it inflated a rebound that the macro reality did not sustain. The good news is that this cleanup leaves a market with less excess; the bad news is that as long as general risk appetite — tech stocks included — stays fragile, every leveraged rebound attempt will meet the same resistance.

Relative behavior again favored BTC, which fell less than the alts and saw net inflows into its ETFs while ETH and SOL kept bleeding. It is the rotation toward quality we keep describing, and the structure of leverage confirms it: alts now hold around 57% of derivatives open interest, versus 43% for BTC — historically Bitcoin ran above 90%. Leveraged risk now lives outside BTC, which is precisely why it falls less.

Expected volatility for the week ahead: high. The October 28 Fed decision, the wave of big-tech earnings, and the evolution of the Hormuz conflict concentrate several high-impact catalysts into a few days.

BTC: +USD 439.1MM, the first positive weekly print after two weeks of outflows and the week's most important signal. Buying was emphatic in two sessions. Monday's inflow (+526.7) was almost entirely BlackRock's doing, with IBIT contributing USD 665.2MM while the rest of the complex subtracted — Fidelity's FBTC posted an USD 83.6MM outflow. Wednesday (+524.8) was a broader bid: IBIT and FBTC together supplied 85% of the total. The turn confirms what we anticipated last week: aggressive institutional selling not only stopped but reversed. The nuance is Thursday: the first outflow in four sessions (-635.6) coincided with the tech pullback, a reminder that demand remains sensitive to the general risk mood. Whether these inflows consolidate next week is the signal to watch.

ETH: -USD 225.1MM, a fourth straight week of outflows that keeps ETH the weakest of the trio in the institutional channel. The magnitude is shrinking week by week, though: -542MM, -320MM and now -225MM. The allocation thesis in ETH's favor stays on pause: without a turn in flows, the asset lacks a buying catalyst of its own to lift it off its lows.

SOL: -USD 17.6MM, also a third negative week, though moderate in magnitude and stable versus the prior ones. Institutional interest in SOL has not reactivated, but the outflow is not accelerating either: a trickle, not a flight.