Market Commentary

THE WEEK IN THREE ACTS: HACK, ELECTIONS AND SELLOFF

The week is best understood as a sequence. It entered with the market still digesting the prior week's Binance hack, with ETF outflows on Monday and Tuesday. On Tuesday the 3rd, the U.S. midterm elections delivered a Democratic majority in both chambers of Congress. On Wednesday the 4th came the relief: with the result known and signs that the Binance incident had not created a systemic problem, risk assets rebounded and BTC reclaimed USD 80,000. It was, largely, a "relief" rebound rather than a change in the underlying picture.

On Thursday the 5th that relief evaporated, and for the same reason that had produced it. A sharp selloff in technology and AI stocks — the worst day for U.S. equities since April 2025 — spread to Digital Assets. The Nasdaq lost 5.5%, entering correction territory; the S&P 500 gave up 4.4% and the Dow 3.4%, or 1,833 points. The blow concentrated in the AI supply chain: the semiconductor index fell 12.3%, its worst session in roughly six and a half years, and Nvidia lost close to 9%. The VIX jumped around 70%, its biggest one-day rise in almost two years, and the contagion was global: South Korea's Kospi fell close to 9% at one point and the Nikkei entered a bear market. It was not, however, an indiscriminate selloff: the 10-year Treasury yield fell to 4.84% — a flight to quality — which reinforces the read of a risk-appetite episode rather than a deterioration of fundamentals. As has become the norm, when global risk appetite contracts, Digital Assets move in the same direction: BTC fell 6% and gave back all of the week's gains.

ELECTIONS: THE MARKET CHANGED ITS READ IN 24 HOURS

The election result was, in fact, the driver of both of the week's moves. On Wednesday risk assets rebounded: the result cleared an uncertainty and the market read it as relief. On Thursday it read it the other way. Investors concluded that a Democratic majority in Congress — alongside Democratic governors at state level — could translate into stricter AI regulation and slower approval of new data centers, and they sold precisely what had risen most: semiconductors, memory and AI infrastructure. That the same event produced a rebound and a selloff on consecutive days says less about the election than about how stretched the sector's valuations had become.

For Digital Assets, the result is, in the near term, a headwind worth monitoring closely. The most relevant point is the Senate: with a Democratic majority, the horizon for the sector's regulatory agenda shifts. The CLARITY Act — the market-structure framework — had already been rejected in the Senate on September 15 by 49 votes to 50, and expires on January 3, 2027 if it is not passed before that date; failing that, the next Congress would have to start from scratch. TD Cowen analysts do not expect it to advance over the next two years. Added to this is the change in committee leadership: Elizabeth Warren, a frequent critic of the sector, would likely chair the Senate Banking Committee, and Sherrod Brown returns to the chamber. The scope is worth qualifying: the consensus is not that what has already been legislated will be undone — the GENIUS Act remains in force and the OCC's stablecoin rule takes effect on January 18 — but that new legislation stalls and the regulatory pace cools. It is a ceiling, not a rollback. What moves the market at bottom — rates, liquidity, flows — still matters more than who controls Congress, but the shift in the regulatory map is a new factor and, in the near term, a negative one, which we will follow closely.

BINANCE: AN ORDERLY REOPENING

A note that closes last week's chapter: Binance resumed withdrawals on Sunday, November 1, in phases and without major incident, and as of November 4 said it had covered 98% of the stolen assets with its own resources, up from an initial 90%. By Thursday it had restored withdrawals for 62 tokens across six networks. The FBI, for its part, formally attributed the attack to the North Korean group TraderTraitor in an alert dated October 31. That the sector's largest platform reopened in an orderly way and covered nearly all the losses is, in itself, a sign that the infrastructure withstood the test. The cost, however, was recorded: in the first nine and a half hours after reopening, about USD 3,640MM left the platform on a net basis — a measure of the dent in confidence that explains part of this week's caution.

Bitcoin (BTC): Trades at USD 75,640 (-2.3% versus the prior Friday's reference). The path was the week in miniature: after a weak start, it reclaimed USD 80,000 Wednesday — with a high near USD 81,100 — and lost it again Thursday, falling to a low of USD 75,230, less than USD 250 from the USD 75,000 psychological level. It is its fourth straight down week, and it pierced the USD 76,000 zone we had flagged as a reference. USD 75,000 stands as the immediate support, and it is worth underlining that price already tested it this week without breaking it; below, analysts flag USD 73,000 and USD 68,000. To mend the tone, BTC needs to reclaim and hold USD 80,000. Support at USD 75,000 and USD 73,000; resistance at USD 80,000 and USD 81,100.

Ethereum (ETH): Trades at USD 2,225 (-0.3%), and was, notably, the most resilient of the three this week: it barely gave ground, even though its ETFs strung together a sixth week of outflows. It joined Wednesday's rebound and Thursday's pullback, but its weekly decline was marginal. As long as it defends the USD 2,200 zone, the short-term picture stays stable within the general weakness. Support at USD 2,150–2,200; resistance at USD 2,300–2,450.

Solana (SOL): Trades at USD 90.45 (-5.0%), the hardest hit of the three. It lost the USD 95 zone from which it started the week and pierced USD 90 on Thursday, with a low around USD 88, its lowest level in months, before recovering the USD 90 area. Paradoxically, its ETF flow was the most stable of the trio this week (see next section), so the drop reflected the general spot-market punishment more than pressure of its own. Having already tested USD 88, the relevant support to watch becomes the USD 85 area; to mend the tone, SOL needs to reclaim and hold USD 95, the level from which it started the week. Support at USD 85–88; resistance at USD 95–96.

The week was a textbook case on the risks of leverage in both directions. On Wednesday, the rebound toward USD 80,000 triggered a short squeeze: bearish bets were force-closed, amplifying the move up. On Thursday the opposite happened, on a larger scale: the drop unleashed close to USD 1,240MM in liquidations over 24 hours (CoinGlass data), of which around 89% were long positions — bullish bets that close automatically when price falls. More than 235,000 traders were liquidated; BTC accounted for some USD 327MM and ETH some USD 209MM of that total.

The read is the usual one: the move was, in its mechanics, a deleveraging flush, not a collapse of fundamentals. The selling came from the forced closing of leveraged positions and from the spot channel strained by the equity selloff, not from a structural deterioration of the thesis. Once that excess is purged, the market is left with a cleaner base, even if price is left uncomfortable.

Relative behavior had a different nuance this week: ETH held up better than BTC and SOL, breaking the pattern of prior weeks in which BTC led the defense. One should not read too much into a single week, but it is worth noting.

Expected volatility for the week ahead: high. The equity selloff, the digestion of the election result, and the absence of a clear buying catalyst keep the market at the mercy of global risk sentiment. Until Wall Street stabilizes, Digital Assets are unlikely to do so on their own.

Note: Friday's data had not yet published at the time of writing; figures are the Monday-through-Thursday accumulation.

BTC: -USD 869.8MM, the worst weekly print in months and confirmation of what we anticipated last week: the institutional outflow on Friday the 30th was not an isolated episode but the start of a turn. Selling concentrated on Monday (-398.6) and Thursday (-430.2), with a single buying session on Wednesday (+74.6), the day of the election rebound. It is the clearest sign that institutional confidence — which had held up during the hack-driven drop — finally gave way under the double blow of the incident and the macro deterioration. Confirming whether these outflows ease is, today, the most important variable for the floor.

ETH: -USD 271.9MM, a sixth straight week of outflows. The contrast with price stands out: ETH was the most resilient asset of the week despite being the one bleeding most in the institutional channel, suggesting its support came from the spot market rather than the ETFs. Even so, its flow trend remains the weakest of the trio.

SOL: -USD 0.8MM, essentially flat and, by far, the most stable flow of the week. After four weeks of outflows, the drip from SOL's ETFs nearly stopped. It is a minor figure in magnitude but positive in direction: institutional selling pressure on SOL, at least in the ETF channel, exhausted itself this week, even as price suffered from the general drag.