16 Oct 2025
Bitcoin is playing out a massive top signal, leading to significant crashes in both Bitcoin and the altcoin market, including Solana. This market volatility has revealed a substantial market inefficiency in crypto funding rates, presenting an arbitrage opportunity to generate quick profits.
Bitcoin is reconfirming a bearish divergence on the weekly chart with a higher high in price and a lower high in the RSI, indicating a likely larger cool-off, sideways consolidation, or pullback in the next one to two months. The 3-day Bitcoin MACD is approaching a new bearish crossover, losing significant bullish momentum. This mirrors previous bearish divergences followed by double bottoms and slight all-time high breakouts before major crashes, with tariff news acting as a catalyst, similar to February's market dump. Major support for Bitcoin is around $107,000-$108,000, with a potential pullback to $100,000 or $98,000 if this support is lost.
The recent violent and fast move towards the downside was accelerated by a liquidation event and tariff announcements, wiping out numerous long positions, open interest, and leverage. This suggests that a major player, possibly multiple market makers, exchanges, or crypto hedge funds, might have been completely liquidated. This scenario echoes the systemic risks observed in 2022 with the Luna collapse, which subsequently led to the downfall of entities like Three Arrows Capital, Voyager, Celsius, BlockFi, and ultimately FTX.
Due to potential systemic risks and the possibility of major players being wiped out, it is recommended to have funds off exchanges and in cold storage or self-custody until market conditions stabilize over the next few days or weeks. For active trading, funds necessarily remain on exchanges, but any excess funds should be withdrawn for safety.
The Bitcoin dominance chart on the 3-day time frame continues to play out a bullish divergence, predicting a bullish relief moving forward for Bitcoin dominance. This implies that the altcoin market will likely underperform Bitcoin, meaning altcoins will do worse than whatever Bitcoin is doing, as evidenced by the recent flash crash where altcoins suffered more severely than Bitcoin.
Ethereum's price has broken below a critical support area of $3,900 to $4,100 on the 3-day chart. If a 3-day candle close below $3,900 is confirmed or if the price fails to reclaim this area, it indicates a formation of larger bearish price structure and potentially longer-term bearish movements over multiple months, with next major targets at $3,000 and possibly $2,800. In the immediate short term (1-2 days), Ethereum is expected to see a slight bounce or choppy sideways price action to stabilize after hitting oversold levels, and a bullish divergence is starting to confirm on the 8-hour chart.
Solana has clearly broken below its previous low, forming a lower high and a lower low, which signifies bearish price structure on the 2-day chart and a potential reversal into a larger bearish trend over weeks or months. The crucial area for bulls to reclaim is $190 to $200; failure to do so implies resistance in this range. Solana dropped towards $170 as predicted, and a break below $170 could lead to further declines towards $156, and most likely $143 to $146. Short-term, Solana is expected to stabilize with choppy sideways price action or a slight bounce in the next one to two days to reset oversold indicators.
XRP is playing out a massive bearish divergence that was warned about months ago, leading to a larger pullback and slowdown. The price dropped below $2, which was predicted from higher levels of $2.70-$2.80, despite initial skepticism. In the immediate short term, XRP is expected to stabilize with choppy sideways price action, potentially a slight bounce or pullback in the next couple of days.
Chainlink experienced an extremely severe drop, from around $22 down to $8 in minutes, which is abnormal price action indicative of forced selling, liquidations, and potentially the wipeout of large players like market makers or exchanges. It is anticipated that news of a massive crypto player going bankrupt may emerge soon. Current support is at $17.40-$17.50, with the next support at $15.20-$15.70 if the current level breaks. Resistance is expected around $19.50-$20. Chainlink is in a larger bearish trend, forming lower highs and lower lows, but expects short-term stabilization and choppy sideways price action over the next one to two days to reset indicators.
A significant arbitrage opportunity exists in crypto funding rates, particularly for Solana, due to market inefficiency. While most exchanges (Binance, OKX, Bybit) show very negative Solana funding rates, BTEX exhibits extremely positive rates. This discrepancy allows for profit generation, and the existence of such a large gap suggests that market makers, who usually arbitrage these differences, might have been liquidated.
To exploit this arbitrage, one must establish a delta-neutral position by simultaneously taking an equal-sized long position on an exchange with negative funding rates (e.g., Bybit) and a short position on an exchange with positive funding rates (e.g., BTEX). This strategy ensures that unrealized profits and losses from price movements cancel out, allowing the trader to passively earn funding fees from the difference in rates. For instance, with negative funding rates, short positions pay long positions, while with positive funding rates, long positions pay short positions.
To participate in trading opportunities and arbitrage, being set up on multiple crypto exchanges is beneficial. BTEX is recommended for its positive Solana funding rates for the short leg of the arbitrage and offers massive trading and deposit bonuses (up to $120,000 USDT from a prize pool, plus deposit bonuses like $200 for a $1,000 deposit) via a specific referral link. BTEX is a no-KYC exchange. Two Bits is another no-KYC exchange option, also offering significant bonuses (up to $10,000 USDT trial funds, $8,000 withdrawable stablecoins, and a free $30 signup bonus with one month free VIP3 upgrade) through its referral link.
Sharing this arbitrage opportunity is expected to cause the funding rate gap to normalize and close faster as more people take the trade, which will ultimately reduce the personal profits of the person disclosing the information. However, the information is shared transparently to help others potentially recover losses from recent market drops and generate easy profits.
Right now, an arbitrage opportunity can be exploited in Bitcoin and crypto funding rates, generating quick and easy profits in the market.
| Key Insight | Summary |
|---|---|
| Bitcoin Bearish Signals | Weekly bearish divergence, 3-day MACD bearish crossover, and repeating top signal point to a larger cool-off or pullback for Bitcoin in the coming months, influenced by tariff news. |
| Altcoin Underperformance | Altcoins are expected to continue underperforming Bitcoin due to a bullish divergence in Bitcoin dominance, leading to more severe drops for altcoins like Ethereum, Solana, XRP, and Chainlink. |
| Market Systemic Risk | The violent crypto crash suggests major players (market makers, funds, exchanges) may have been wiped out, raising systemic risk concerns reminiscent of the 2022 market collapses. |
| Fund Security Advice | It is recommended to move funds off exchanges and into cold storage or self-custody to mitigate risks during turbulent market conditions, especially for non-trading capital. |
| Funding Rate Arbitrage | A significant arbitrage opportunity exists by exploiting the massive funding rate differences for Solana across exchanges (e.g., negative on Bybit, positive on BTEX). |
| Arbitrage Strategy | Implement a delta-neutral strategy: long on exchanges with negative funding rates and short on exchanges with positive funding rates to passively earn funding fees without directional price risk. |
| Short-Term Market Outlook | Major crypto assets (BTC, ETH, SOL, XRP, LINK) are likely to experience short-term stabilization and choppy sideways price action in the next 1-2 days to reset oversold indicators. |
