Crypto market recap: Political risks and ETF outflows weigh on Bitcoin and Ethereum

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BTC and ETH slip as Fed stays cautious

Bitcoin: Outflows are rising, “whales” are buying, and political risks are in focus

According to Farside, Bitcoin ETFs recorded about $900 million in weekly net outflows after a strong previous week. The shift reflects broader macroeconomic uncertainty, but flows are not one-sided: large holders are using weakness for accumulation. The purchase of 584 BTC (~$63.9 million) by one “whale” illustrates the renewed “buy-the-dip” tactic, and the number of entities holding more than 1,000 BTC increased from 1,392 to 1,417 over the week, which indicates that long-term capital still has strategic value.

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The market narrative is divided. Seasonal “bulls” note that late-year weakness after a halving has precedents and maintain a constructive view for the fourth quarter in the absence of a decisive breakdown of long-term trends. Meanwhile, derivatives traders remain cautious ahead of key statistics.

A separate focus is the political discussion: proposals to create a national Bitcoin Reserve. Critics warn that such a step could concentrate supply in the hands of the state, create a liquidation risk due to political reshuffles, and even undermine confidence in the U.S. dollar if perceived as a signal of fiat currency fragility, writes Cointelegraph. Germany’s sale of 50,000 BTC in 2024, which is believed to have pressured prices, serves as a warning in favor of government influence on the market.

Ethereum: Record ETF outflows and mixed holder behavior

Ethereum has been declining for the second week in a row, briefly rebounding by about 1%, but still holding near the $4,000 mark. U.S.-registered spot ETH ETFs recorded a record weekly outflow of $800 million, offsetting the strong inflows of early September and emphasizing how quickly institutional sentiment can change. Nevertheless, about $26 billion remains in ETH funds — approximately 5.37% of the total supply, which highlights the asset’s deepening presence in regulated products.

ETH price dynamics. Source: TradingView

On-chain signals are mixed. The rise in the Liveliness metric indicates that long-term holders are distributing assets during the downturn, increasing short-term pressure. At the same time, Ethereum’s exchange supply ratio is close to multi-year lows, indicating a long-term accumulation trend, as less ETH remains on centralized platforms. Large liquidations (~$1.5 billion) this week reinforced this trend, as leveraged long positions were forced out.

Structurally, the ETF portfolio continues to expand. A new wave of amendments to spot Solana S-1 ETFs from major issuers includes staking features — a development that investors see as a potential clarification for staking in spot Ethereum ETFs. Combined with recent innovations in spot XRP and Dogecoin products, new index crypto ETFs, and evolving listing standards, issuers consider October as a possible turning point for the entire crypto ETF complex.

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