Core Insights - The Bitcoin market experienced a sudden crash on September 22, 2025, with its price dropping to around $114,000, leading to a significant loss in market capitalization and the liquidation of $1.7 billion in long positions [1] - Analyst Paolo Schiavone from Goldman Sachs identified this crash as a pivotal moment, indicating a shift in market dynamics and warning that falling below the 200-day moving average would increase risks [1][2] - Following the crash, Bitcoin's price stabilized around $109,000, with market participants showing mixed emotions and a lack of decisive trading activity [3][5] Market Dynamics - The market showed signs of indecision with a horizontal consolidation phase following the initial crash, and trading volumes decreased significantly [2] - There was a split in market sentiment, with half of the participants concerned about inflation and the other half worried about growth, leading to fragmented trading behavior [2] - The futures market indicated a cooling of bullish sentiment, as the perpetual funding rate shifted from positive to near zero, suggesting a decrease in long positions [3] Technical Analysis - The 200-day moving average is viewed as a psychological threshold for traders, with its breach potentially leading to risk aversion among market participants [6] - The market's reaction to technical indicators is influenced by the distribution of holdings, with long-term holders remaining stable while short-term leverage is decreasing [5][6] - The behavior of the AI-related stocks in the U.S. market, particularly Nvidia, showed signs of fatigue, which could impact broader market sentiment [3] External Influences - The U.S. Treasury yields experienced fluctuations, with discussions around fiscal discipline resurfacing, impacting market expectations [2] - The potential for a "soft landing" in the U.S. economy remains, with GDP growth projected at 2% and core PCE around 3%, indicating that the economy has not yet reached a critical downturn [5] - The interconnectedness of global markets was evident, as the decline in Bitcoin prices also affected technology indices in the Chinese market [5] Future Outlook - The upcoming employment data in early October could significantly influence market sentiment and the Federal Reserve's interest rate decisions, with a possibility of a 50 basis point cut if job data continues to weaken [5][7] - The market is expected to experience increased volatility as it navigates through the end of September and the beginning of October, with traders advised to remain cautious [7] - The potential for a rebound exists, but it may be short-lived and fragmented due to the current market conditions and sentiment [7]

Core Viewpoint - The recent Bitcoin flash crash is seen as the first signal of a market shift, indicating a potential slowdown in the previous three weeks of risk asset rally [1][4][6] Market Conditions - The past three weeks experienced a significant rally in risk assets, with momentum trading yielding notable returns, but the pace is now changing [1][4] - Bitcoin's flash crash led to the forced liquidation of $1.7 billion in long positions, impacting nearly all major cryptocurrencies [1] - Bitcoin's price fell below $110,000, currently trading around $109,000, with the $110,000 level identified as a critical technical support [1][4] Macro Environment - The macro environment remains volatile, with consensus trades facing significant pressure, particularly those betting against the dollar and for a steepening yield curve [3][7] - There is a 50/50 split among market participants regarding concerns over inflation versus growth, indicating a lack of clear direction in the market [7] Economic Forecast - The forecast for the U.S. economy includes a GDP growth of 2%, core PCE at 3%, and an unemployment rate of 4.5% by year-end [7] - The terminal interest rate is expected to approach 2.5%, with a pessimistic view on fiscal conditions [7] Future Outlook - The upcoming Fed rate cut cycle is anticipated, with predictions of three insurance rate cuts, potentially including a 50 basis point cut in October if non-farm payroll data continues to be revised downwards [9] - Factors such as the peak of tariff impacts, significant fiscal stimulus, and loosening financial conditions are expected to support risk assets [10]