Trading Desk Insights
Risk assets stayed heavy through the weekend as U.S.-China trade tensions kept markets on edge. The initial spark came late last week when China dropped a surprise set of export controls on rare earths, a clear shot at the U.S. defense supply chain where China holds most of the cards. The U.S. leans on them for about 70% of its rare earth imports. Things escalated fast, with President Trump threatening a 100% tariff on all Chinese imports by November 1. By Sunday, though, he walked it back with a breezy “Don’t worry about China, it will all be fine” on Truth Social. That cooled the mood just enough to stop the bleeding in risk assets.
Markets had already taken the hit. Nasdaq dropped 4%, VIX jumped 30% to 22, and gold caught a bid as traders moved to safety. Crypto saw a sharp flush, with $19.1 billion in leveraged positions liquidated in a single day, the largest wipeout on record across 1.6 million accounts.
BTC is clawing its way back this morning, trying to build off $110,000 support. Next downside levels to watch are $107,000 and $102,000, the latter lining up with the 50-week moving average. Funding flipped negative overnight, which in this market tends to be a bullish tell, perps often get pulled back up toward spot when shorts crowd in. That dynamic is in play again as spot ETF flows show strength, with over $1 billion in volume in the first 10 minutes of U.S. trading today. Still, spot needs to follow through meaningfully for the rebound to stick.
Since Friday’s bounce, AI names like TAO have been leading on the upside. Layer 2s are trying to find their feet but still lag the rest of the board.
BTC options on Monday showed traders getting comfortable again, selling vol and rebuilding carry trades. Implieds settled back into the low 40s, signaling expectations for some sideways chop ahead
Crypto Charts
ETF Flow
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