The great trade shift, with employment and prices under dual pressure, capital flocking to the crypto market?

1. The Real Economy under Tariffs: Trade Shifts and Data Pressure

Since the implementation of reciprocal tariffs on August 7, the global trade landscape has undergone significant changes. U.S. imports have sharply declined, the global manufacturing PMI has entered a contraction zone, and the growth momentum of the real economy has noticeably weakened. However, the "trade diversion" effect triggered by the tariffs is becoming apparent—although exports from China to the U.S. have cooled, exports to ASEAN are showing rapid growth, becoming an important support for alleviating trade pressure.

Deeper impacts are being transmitted along the price and employment chain. The overall US CPI appears stable, but the core CPI continues to rise, with the price increase of imported goods being particularly prominent. The 100% pharmaceutical tariff, which will take effect on October 1, is expected to further drive up the prices of related goods, directly pressuring consumer spending.

The job market is also showing signs of fatigue: the manufacturing new orders index has only slightly rebounded, the employment growth rate has begun to slow down, and the consumer confidence index continues to decline. The University of Michigan's consumer confidence index for September is expected to be 55.4, under pressure from last month's 58.2, and last month's data was already below the expected 58.6.

2. Increased Capital Outflow: Migration from Risk Assets to Safe Haven Areas

The uncertainty of tariffs continues to amplify the pressure of capital outflow, becoming a core factor affecting the sentiment of the capital market. Funds are accelerating their exit from the higher-risk stock market and shifting towards highly liquid assets, forming a clear "defensive" migration characteristic. This migration is reflected not only in the adjustments of traditional asset allocations but also showcases a unique "bridging" effect in the cryptocurrency market.

Data from September shows that despite a shrinkage in the total market value of cryptocurrencies, the structural characteristics of capital inflow are significant: stablecoins saw a monthly inflow of $2.5 billion, while Bitcoin ETFs had a net inflow of $1.5 billion. Behind this phenomenon is the proactive avoidance by enterprises and investors of the limitations of the traditional financial system—stablecoins (such as USDT/USDC) have become new tools for cross-border trade settlement, effectively hedging against exchange rate fluctuations and payment delay risks; while Bitcoin is endowed with the attribute of "digital gold," becoming an important asset for hedging against inflation and geopolitical risks, which highly aligns with the current background of global macroeconomic instability and recurring geopolitical conflicts.

III. Intertwining Macroeconomic Variables: Dual Disturbance of Policy and Liquidity

Behind the shift in capital are the complex intertwining of multiple macro variables, among which the influence of Federal Reserve policy and the political deadlock in the United States is the most profound.

The current core trading logic in the market revolves around expectations of interest rate cuts by the Federal Reserve. The interest rate swap market predicts a 25 basis point cut on October 29, 2025, with a total reduction of 50 basis points for the year, and an additional 50 basis points cut in 2026, while the neutral interest rate remains at 3.25%.

However, the economic data since September has shown a "bearish" characteristic: the monthly growth of durable goods orders in August was +2.9%, and the final annualized quarterly growth rate of real GDP for the second quarter was +3.8%, both of which exceeded expectations and weakened the interest rate cut expectations. Additionally, the Federal Reserve reduced assets by 128.7 billion USD during weeks 34-38 and continued to decrease its holdings of US Treasuries, further tightening market liquidity.

The more severe risk comes from the U.S. government shutdown crisis. The two parties are in sharp opposition over the temporary spending bill, and the probability of a government shutdown has soared to over 75%. The Senate's reconvening on September 29 is the last window period. If a shutdown occurs, the Bureau of Labor Statistics will close on October 1, leading to delays in the release of key data such as the employment report on October 4 and the CPI report on October 15. This will significantly increase the difficulty of the Federal Reserve's decision-making at the end of October, and could even disrupt the pace of interest rate cuts. Historical experience shows that after the 16-day government shutdown in 2013, delays in data releases continued until the 51st day, and this uncertainty will exacerbate market volatility.

Liquidity tightness has become a reality that cannot be ignored. As of the week of September 24, the reserve balance of the U.S. banking industry has fallen below $3 trillion, reaching the lowest level since January 2025, with foreign banks' cash assets declining faster than domestic banks. Although the Federal Reserve has slowed down the pace of balance sheet reduction, the dual impact of quantitative tightening and the Treasury's increased debt issuance continues to withdraw liquidity from the financial system, with key overnight rates rising from 4.08% to 4.09%, highlighting the pressure of rising financing costs.

IV. Market Outlook: Data Window and Opportunities for Crypto Assets

In the short term, the release of intensive economic data will become the "touchstone" for market direction. From September 29 to October 3, the United States will successively announce core data such as the month-on-month rate of pending home sales, JOLTS job openings, ADP non-farm employment, ISM manufacturing PMI, and non-farm payroll changes. Any deviation from expectations in any of these data could trigger fluctuations in the US dollar and risk assets. Taking the non-farm employment data on October 3 as an example, if it is below the expected 22K, the US dollar may weaken, and ETH/BTC is expected to rise; if it is above expectations, it could suppress the performance of crypto assets.

From a technical perspective of the crypto market, Bitcoin is currently in a critical adjustment period: the daily chart is showing a death cross near the zero axis, and the weekly death cross is expanding and preparing to challenge the previous low of 107200. It has already pulled back from the high for 7 weeks, with about 5 weeks remaining until the last 12-week pullback cycle. Theoretical calculations indicate that the pullback bottom may be in the range of 84500-89300. However, there is no need to be overly pessimistic in the medium to long term, as the global M2 has stopped declining and is rebounding. Its liquidity is expected to be transmitted to Bitcoin around the week of October 12. If M2 continues to reach new highs, it is likely to push Bitcoin's weekly chart to form a golden cross again and continue to set new highs.

Against the backdrop of macroeconomic instability and escalating geopolitical conflicts, the quantitative easing and debt financing strategies adopted by various countries may drive Bitcoin to form the fourth wave of weekly golden crosses within the monthly golden cross channel. For investors, the current adjustment period may harbor layout opportunities – if Bitcoin retraces to the expected bottom range and the daily chart shows a golden cross signal, it will become a prime buying window within the monthly upward channel.

Conclusion

Tariff frictions are reshaping the global trade and capital flow landscape. The pressures on the real economy and the uncertainties of the traditional financial system are driving capital to seek safe havens in crypto assets. Despite the short-term market facing triple pressures from the Federal Reserve's policy fluctuations, government shutdown risks, and technical adjustments, the "digital safe-haven" property of cryptocurrencies is continuously strengthening from the perspective of liquidity transmission cycles and asset allocation logic. In the upcoming dense data windows and policy nodes, closely tracking macro signals and market structure changes will be key to seizing opportunities.

Author: WolfDAO