16 Oct 2025
The crypto market experiences significant short-term volatility influenced by US stock market developments, including tariff announcements and their subsequent retraction, while Bitcoin exhibits a potential top signal and ongoing bearish divergences on larger timeframes. Ethereum, however, confirms a new bullish divergence, offering positive news for altcoins as Bitcoin dominance shows rejection from resistance.
The US stock market, specifically the S&P 500 index, experienced a massive sell-off following President Trump's announcement of new 100% tariffs on China, set to take effect on November 1st, as markets generally react negatively to tariff news.
President Trump later retracted his statement regarding new tariffs on China, indicating a resolution, which prompted a significant rebound in the US stock market and potentially averted a "Black Monday" scenario. This unexpected news caused immediate market whiplash and subsequent recovery.
On the weekly timeframe, the Bitcoin Supertrend indicator remains green, suggesting a larger bull market, but a recent weekly candle close technically reconfirms a bearish divergence, with a higher price high contrasting a lower weekly RSI high, indicating a potential loss of bullish momentum.
The daily Bitcoin price chart displays a fractal pattern similar to the beginning of 2024, characterized by a bearish divergence, followed by a double bottom, a slight all-time high breakout, a major dump, a short-term bounce, choppy sideways price action for one to two weeks, and then a further price correction over multiple weeks. This fractal pattern remains uninvalidated.
Bitcoin's price is bouncing on the 4-hour chart, aligning with the US stock market's recovery, influenced by short-term bullish news and a bounce from oversold RSI territories. This signals a likely break or relief from bearish price action, possibly leading to a recovery.
Bitcoin dominance rejected a significant resistance area, previously support, located between 60.5% and 61%. This rejection is typically favorable for altcoins, as it suggests they may outperform Bitcoin in the immediate short term.
Ethereum avoided confirming a break below its major 3-day support area, ranging from approximately $3.9K to $4.1K, thanks to the Bitcoin dominance rejection and the positive market news. It is now retesting this critical support zone.
Ethereum showed a continued bullish divergence on the 8-hour timeframe and officially confirmed a strong bullish divergence on the daily timeframe. This indicates a likely lack of bearish momentum, suggesting a larger sideways consolidation or further bullish relief in the coming weeks, despite potential occasional red candles.
Key resistance levels for Ethereum are identified at $4250-$4280, $4450-$4.5K, and major resistance at $4680-$4720, which could be encountered during a bullish relief.
Solana, following the broader market's short-term bounce, is testing a crucial resistance area between $190-$200. A confirmed two-day candle close above $200, holding that level, would be a very positive signal, potentially leading to moves towards $215-$216 and possibly $230.
Significant support for Solana is expected at roughly $170, a level that previously saw a bounce.
XRP continues to show a massive, uninvalidated bearish divergence on the weekly timeframe, indicating a prolonged cool-off and a lack of bullish momentum, which has been predicting a larger pullback over several months.
In the immediate short term, XRP is experiencing a bounce and may retest its previous support, now acting as resistance, between $2.70 and $2.80. Despite this short-term bullish action, XRP's larger price structure remains bearish, characterized by lower highs, lower lows, and a lack of major breakouts above key resistance.
Chainlink is undergoing a short-term bounce, but technically remains within a larger bearish price structure. It is currently testing an important resistance area between $19 and $20.
Support for Chainlink is expected around $17.30-$17.50 and $15.10-$15.60. A confirmed breakout and hold above $20 could lead to a move towards $22, which would likely be the next resistance point.
A significant arbitrage opportunity emerged from large differences in Solana funding rates across exchanges, specifically very negative rates on Bybit and very positive rates on Bitinex. This allowed for a delta-neutral strategy.
The strategy involved simultaneously opening a long position on Bybit and a short position on Bitinex, effectively canceling out price fluctuations and generating passive income from funding fees. This yielded over $10,000 USD in profits from funding fees within two days. Margin was added for risk management.
Bitinex offers substantial trading and deposit bonuses, including up to 120,000 USDT for trading and specific bonuses for deposits, accessible via a referral link. It operates as a no-KYC exchange.
Two Bit provides promotions such as up to 10,000 USDT in trial funds, 8,000 USDT in withdrawable stablecoins, and a free $30 signup bonus with a one-month VIP3 upgrade, also accessible via a referral link. This is also a no-KYC exchange.
Overall, in terms of where the market is likely going to go in the next 1 week, for example, we're likely going to be a little bit more bullish than we are bearish.
| Insight | Details |
|---|---|
| Market Reaction to Tariffs | Markets generally react negatively to tariff announcements, often leading to massive sell-offs. Conversely, walking back such statements can trigger significant recoveries. |
| Bitcoin's Larger Timeframe Outlook | Despite short-term bounces, Bitcoin's weekly chart shows a bearish divergence, and the daily chart mirrors an early 2024 fractal that preceded a major dump, indicating ongoing loss of bullish momentum on larger timeframes. |
| Altcoin Opportunity from Bitcoin Dominance | A rejection of Bitcoin dominance from key resistance is good news for altcoins, as it often signals altcoins outperforming Bitcoin, leading to short-term bullish price action for them. |
| Ethereum's Bullish Signal | Ethereum confirmed a bullish divergence on the daily timeframe, suggesting a lack of bearish momentum and a likely period of larger sideways consolidation or further bullish relief over the coming weeks. |
| Delta-Neutral Arbitrage Strategy | A trading strategy involving simultaneous long and short positions on different exchanges, exploiting significant differences in funding rates (e.g., negative on one, positive on another), can generate passive income from funding fees regardless of price movement. |
| Predicting Policy Impact | It is challenging to predict market movements driven by sudden policy announcements or retractions from governmental figures, highlighting the unpredictable nature of external economic factors on crypto. |
