Recently, the cryptocurrency market has once again experienced drastic fluctuations under the impact of macroeconomic uncertainty and geopolitical events, with market sentiment indicators temporarily reaching extreme fear zones. This scene inevitably reminds seasoned investors of the 'golden pit' period when the market experienced deep corrections followed by a strong rebound from March to April 2025. This article will analyze the similarities and differences between the current market and that period from multiple dimensions, and assess the stage of the market and potential opportunities in conjunction with the latest capital flows, institutional dynamics, and macro background.
1. Market state comparison: Panic resurfaces, but the structure has quietly changed
The current market shows significant emotional similarities to the adjustment period in the first quarter of 2025, but the driving factors and underlying structures have undergone profound changes.
Similar panic sentiment: Data from market sentiment analysis platform Santiment shows that since March 2025, extreme negative sentiment peaks have appeared four times on social media, occurring on April 5, June 21, August 23, and October 10. After each emotional trough, the Bitcoin price experienced a significant rebound, ranging from 5.5% to 26.5%. The most recent panic stemmed from geopolitical tensions and trade policy in early October, mirroring the sell-off caused by global tariff issues in March-April, once again validating the effectiveness of the contrarian investment logic of 'when others are fearful, I am greedy' in the crypto market.
Different market structures and driving forces: Compared to the beginning of the year, the current market has two fundamental distinctions:
The clearing of leverage is more thorough: The volatility in October further cleaned out high-leverage funds in the market, resulting in a potentially healthier chip structure than in the first quarter, laying a more solid foundation for future trends.
The strengthening of institutional dominance: The current incremental capital in the market mainly comes from institutions rather than retail investors. Due to friction in on-chain operations, a large amount of institutional capital chooses to enter through Bitcoin spot ETFs, MicroStrategy (MSTR) stocks, and other public market channels, which explains why these assets often show stronger relative resilience during overall market consolidation.
2. The core engine remains: Continuous injection of institutional funds and stablecoins
Despite short-term emotional fluctuations, the core narrative supporting this cycle—institutionalization and compliance—has not only remained unchanged but has continued to deepen.
The ETF channel continues to attract capital: Bitcoin and Ethereum spot ETFs have become the main bridge for traditional capital to enter the crypto world. As of the third quarter of 2025, the total assets under management of Bitcoin spot ETFs in the United States have reached $52.4 billion, with cumulative net inflows exceeding $11.7 billion. The iShares Bitcoin Trust (IBIT) under the world's largest asset management company BlackRock alone holds more than 700,000 Bitcoins, valued at approximately $75.5 billion. This continuous and stable influx of funds provides a solid liquidity foundation for the market.
Public companies and 'crypto treasury' actively allocate: Public companies represented by MicroStrategy continue to increase their Bitcoin holdings. In the first quarter of 2025, the company again purchased $1.65 billion worth of Bitcoin, bringing its total reserves to 214,400 coins. At the same time, a new type of 'crypto treasury company' is emerging, actively allocating cryptocurrencies like managing traditional treasury assets. Data shows that such companies recently purchased over $2 billion worth of Ethereum (ETH) in one week, demonstrating strong confidence in core crypto assets.
The expansion of stablecoins indicates potential buying power: The total market value of stablecoins is a key indicator of potential off-market purchasing power. According to brokerage data, as of May 2025, the total market value of global stablecoins has surged to nearly $250 billion, increasing by over 1100% in about five years. Especially against the backdrop of Hong Kong's (stablecoin regulatory draft) approval and the advancement of relevant legislation in the United States, the compliant stablecoin sector is experiencing explosive growth. The rapid growth in market value indicates that a large amount of capital is ready to be converted into Bitcoin and other crypto assets at any time, serving as a 'reservoir' of future purchasing power in the market.
3. Macroeconomic background and cycle script: Coexisting short-term turbulence and mid-term opportunities
Broadening the view to the global economic and monetary policy cycle can provide a clearer positioning for the market's short- to mid-term direction.
The dual impact of macro turning points: The current U.S. economy shows signs of rising unemployment and slowing job growth, with the market generally expecting the Federal Reserve to begin a rate-cutting cycle. This creates a macro-positive environment for risk assets, as rate cuts typically lead to lower bond yields, driving capital to seek higher-yielding assets. However, signals of economic weakness in the early stages may also exacerbate market concerns about recession in the short term, triggering risk-averse sentiment and leading to volatility. This is similar to the situation in the first quarter of 2025.
A clear 'script' for market stages: Some market analyses suggest that the crypto market may be following a three-stage script evolution:
Short-term (next few weeks): Influenced by economic data and recession concerns, the market may maintain a pattern of turbulence and correction, with Bitcoin likely testing previous lows and altcoins potentially experiencing greater volatility.
Mid-term (Fourth quarter of 2025 to first quarter of 2026): Once rate cuts are implemented, liquidity-driven trends are expected to unfold. A massive amount of traditional capital (such as $7.2 trillion in money market funds) could push Bitcoin to set new historical highs, even if only a small proportion flows into the crypto market, and may lead altcoins into a frenzy.
Long-term (after the first quarter of 2026): Attention should be paid to the potential resurgence of inflation due to factors such as tariffs, which could lead to a tightening of monetary policy again, posing a potential risk for this cycle.
4. Key observation indicators and strategy outlook
In a complex market environment, investors should focus on the following types of objective data rather than being swayed by short-term emotions.
The 'compass' of capital flow:
BTC/ETH spot ETF daily net inflow: This is the most direct window to observe institutional capital attitudes.
The total market value curve of stablecoins: Its growth slope reflects the speed of new capital entering the market.
The dynamic of public companies like MicroStrategy increasing their positions: This can serve as a barometer for the capital allocation direction of large enterprises.
Lessons from historical cycles: Looking back at history, Bitcoin has seen cycle peaks multiple times in the fourth quarter of the year following its halving (such as 2013, 2017, and 2021). Additionally, seasonal patterns show that September is often a relatively weak month for Bitcoin, while October has historically been one of the strong months. This dual effect of 'seasonality + halving cycle' is worth considering in strategy planning.
Conclusions and strategic insights
Overall, the current market shows striking similarities to the 'golden pit' of March-April 2025 in terms of extreme panic sentiment and the degree of leverage clearance. More importantly, the institutional foundation of the market is stronger than before, and the inflow of funds into core assets has never ceased.
For investors, the current period of volatility should be seen as a window for careful selection and phased layout, rather than a reason to exit. Strategies to consider include:
Focus on core assets: In times of high market uncertainty, Bitcoin and Ethereum, due to their stronger institutional consensus and liquidity, typically exhibit better risk resilience.
Adopt contrarian thinking: Closely monitor market fear and greed indices, social sentiment, and other indicators, maintaining optimism in extreme fear zones and considering phased accumulation.
Establish a clear cyclical framework: Recognize that the market may be in a transition period of 'short-term turbulence and mid-term explosion', maintain patience during short-term fluctuations, and prepare for the liquidity-driven market that may come in the mid-term.
History does not simply repeat itself, but always carries similar rhymes. In an era of systematic institutional capital allocation, every deep correction caused by short-term panic could become a valuable asset allocation opportunity from a long-term perspective.
