Crypto Market Enters 'Initial Stabilization' Phase Amid October 10 Liquidation Event and Macro Headwinds

Citing Odaily, multiple venture capital firms have stated that the ongoing crypto market correction is driven by two key factors: the concentrated liquidation event on October 10 and a tighter macroeconomic environment. Dragonfly partner Rob Hadick noted that low liquidity, poor risk management, and flaws in oracle or leverage design led to large-scale deleveraging, increasing market uncertainty. Tribe Capital partner Boris Revsin described the event as a 'leverage washout' with ripple effects across the market. Meanwhile, macroeconomic factors such as cooling rate-cut expectations, sticky inflation, weak employment data, rising geopolitical risks, and sluggish consumer activity have pressured risk assets over the past two months. Robot Ventures partner Anirudh Pai pointed out that some U.S. leading economic indicators are declining, a pattern seen during previous 'recession concern' periods, and it remains difficult to determine if a full-blown recession will follow. VCs also noted that, aside from tokens supported by buybacks, the market lacks new capital inflows, and ETF inflows have slowed, accelerating price declines. Looking ahead, VCs emphasized the importance of macroeconomic clarity, including interest rate policy and the future leadership of the Federal Reserve, which will significantly impact risk assets. The data blackout period is also increasing volatility, with the next employment report seen as a key signal. Additionally, long-term drivers such as accelerating on-chain economic activity, AI-driven trading sentiment spillovers, and payment and tokenization trends are still underestimated by the market. At this stage, VCs generally believe the market has entered an 'initial stabilization' phase, but it is not yet enough to confirm a bottom. Bitcoin has rebounded from around $80,000, and ETF inflows have slightly improved, but the market remains sensitive to interest rates, inflation, and AI earnings reports. Several respondents view the $100,000–$110,000 range for Bitcoin as a key level for a market sentiment reversal. A more solid reversal structure may form only if ETFs continue to show net inflows and derivatives open interest rises moderately without excessive leverage. Some investors noted that the current correction has reset the valuations of some high-revenue tokens to 2024 levels, with stronger on-chain fundamentals showing relative appeal. Bitcoin's dominance has not significantly increased during this correction, indicating continued demand for high-quality altcoins.