Introduction to the Crypto Week Ahead
The Bitcoin price has been a topic of interest as it hovers around $115,000 ahead of the Federal Reserve meeting. The meeting, scheduled for October 29 at 2:00 p.m. ET, followed by Chairman Jerome Powell’s press conference at 2:30 p.m. ET, is expected to have a significant impact on the cryptocurrency market. According to the CME FedWatch methodology, markets are pricing in a 25 basis point cut this session, with odds narrowing further through year-end.
The setup is directly linked to Bitcoin’s macro channel, where the forecast is initially applied to real 10-year yields and the dollar and then to ETF demand and derivatives positioning on the tape. The relationship between Bitcoin and the US real yields and dollar has been a subject of interest, with Bitcoin showing episodes of strong inverse correlation with US real yields and tending to lag when the dollar strengthens.
Flows frame the week, with US spot Bitcoin ETFs fluctuating from a large outflow on October 16th to a large inflow on October 21st and then to a modest net gain on October 24th. Concentration remains at the top, with cumulative net gains since launch of IBIT up $65.3 billion, FBTC up $12.6 billion, and GBTC down $24.6 billion, according to Farside.
Positioning and Market Expectations
Positioning is very important for the event, with open interest in options near record levels on Deribit, increasing the risk of a gap in headlines and the rhythm of press conferences. According to CoinGlass, perpetuals funding has performed slightly positively on major trading venues with high aggregate open interest in futures. This blend can be a catalyst for two-sided wicks if the path deviates from pricing.
The October 17th risk-off session, which saw around $147 million in BTC liquidations tracked by CoinGlass, highlights the potential for wipeout if positioning becomes crowded. The macroeconomic context has changed in the last two months, with the policy stance repriced to cuts in the Oct. 28-29 meeting, while portions of U.S. data flows were hit by shutdown disruptions making visibility difficult.
Real yields eased from summer highs, with the 10-year TIPS proxy at about 1.7 percent late last week, and the dollar stabilized with a gain against the yen heading into Fed week. These variables are important to digital asset risk appetite because BTC has shown episodes of strong inverse correlation with U.S. real yields and tends to lag when the dollar strengthens, although the relationship is sovereign and can break down.
Key Factors to Watch
Mechanically, a 25 basis point cut combined with a cautious tone would firm expectations initially, resulting in 10-year real yields trending flat to slightly lower and the dollar remaining stable to weaker. On this path, the ETF networks could be mixed to slightly positive, with a chance for broader participation beyond the top two if Powell avoids hawkish turns while the spot tape trades within a range of buy-the-dip interest around print volatility.
A more dovish interest rate policy of 25 basis points, coupled with an easing bias or weaker recognition of labor market policies, is likely to lower real yields and put pressure on the dollar. This setup has historically supported ETF breadth and provides upside potential of 6 to 12 percent over the 72-hour period following the decision if capital flows slow.
Holding with a firm tone boosts real yields and the dollar, a combination that has coincided with net outflows in previous episodes where IBIT and FBTC can absorb some demand but the aggregate can turn negative, and where long liquidations increase amid increased open interest.
Execution and Market Outlook
For the execution date, the causal chain is straightforward. Check out the 10-year real return proxy and DXY during the statement and press conference. A 10 basis point drop in real yields in a short window has in previous episodes led to stronger next-day ETF networks, while a firm dollar often fuels defensive inflows.
Refresh the US spot ETF flow tape after 6-7pm ET and again before the open to capture late allocations using the SoSoValue or Farside Investors dashboard. For derivatives stress, monitor aggregate open interest versus market cap, funding rate heatmaps, and liquidation dashboards on CoinGlass, then check the 25-delta skew and term structure options on Deribit to confirm whether the surface is put-rich on a hawkish view or call-rich on a moderate pursuit.
The macro calendar adds two potential second-order stimuli after the Fed. Third-quarter GDP arrives at 8:30 a.m. ET on Thursday, followed by personal income and expenses including PCE on Friday at 8:30 a.m. ET. Nonfarm payrolls are scheduled for the first Friday in November on the Bureau of Labor Statistics schedule, although the timing is subject to change based on recent shutdown headlines.
Read more about the crypto week ahead and its potential impact on the market at CryptoSlate.
