The Rake Review: October 2025

October Brought Lessons and November Brings Opportunity

As has been the case throughout this bull market, October delivered both highs and lows in rapid succession, each one offering its own lesson. A new all-time high was quickly followed by some hard truths for those chasing quick gains.

From All-Time Highs to Hard Lessons

October has built such a strong reputation for Bitcoin performance that it earned the nickname ‘Uptober’ from the crypto community. This year started just as expected. Within the first few days, Bitcoin printed a new all-time high and optimism returned across the board. But instead of pushing higher, the market was met with a brutal reversal that flipped sentiment overnight. What followed was not just a dip, but a historic liquidation event that shook the market and reminded everyone of one core truth in crypto.

Once again, the market served a painful reminder of why leverage should be approached with extreme caution. We have said it countless times and will keep saying it. Most people are better off buying spot, being patient, and letting the market do the work. But still, time after time, traders try to over-optimise, copy trade, or take on leverage thinking they can outperform. Unless you are part of the 0.01% of elite traders who can consistently beat the market, which is unlikely, the smarter move is to focus on accumulation and long-term positioning.

Large liquidation events are not rare. They are part of the game, especially in high volatility markets like crypto. Institutions and market makers know this better than anyone. They use size and timing to push price into high-leverage zones, triggering stop losses and liquidation cascades. Once the books are cleared, price often reverts back to its previous range. These are not fundamental moves. They are mechanical, structured plays designed to exploit retail positioning.

The professional manipulators playbook is simple. Dump the price, trigger liquidations, buy at a discount, then create momentum and exit at the highs. For leveraged investors, it usually ends in a wipeout. For professional manipulators, it is just another opportunity to accumulate or rent seek.

Yes, this wiped out a lot of traders and left a sour taste, particularly for more traditional investors who already view Bitcoin with scepticism. But for those who understand how the market functions, this was just another shakeout. Bitcoin has been through worse. It has survived 85% drawdowns, major exchange hacks, insolvencies, and regulatory crackdowns. Each time, it recovers and continues to grow.

Unlike July, when a Satoshi-era whale dumped nearly $3 billion in Bitcoin and triggered widespread panic, this month’s price action has been far more stable and mature. Sentiment, while cautious, remains constructive. That alone says a lot about how far the market has come.

Despite the severity of the liquidation, we now enter a much healthier backdrop. We have seen rate cuts, progress on the geopolitical front, and continued institutional adoption. Smart money continues to accumulate, not panic.

Bitcoin enters November with strong on-chain fundamentals, a cooling macro backdrop, and one of the most reliable seasonal trends in its favour. Historically, November has delivered an average return of 40.5%, and nine of the last fourteen Novembers have closed green.

October brought records, both good and bad. But now the dust has settled, the opportunity is clear. The conditions are aligning for what could be a very bullish end to the year.

The Shift from Shelter to Opportunity

When it comes to asset allocation, investors have no shortage of options. Most fall into the risk-on category and tend to perform well when macro conditions are supportive. But when sentiment turns, there is often a clear shift into risk-off assets that are perceived as safer havens.

Gold is traditionally seen as the go-to risk-off asset, while the S&P 500 represents a typical risk-on index, made up of equities that benefit from bullish conditions. Bitcoin, however, sits somewhere in between. While it is increasingly being pitched as a hedge, it still behaves like a high-beta risk-on asset, sitting much further down the risk curve.

In last month’s Rake Review, we examined Bitcoin’s correlation with both ends of the market. The conclusion was clear. Bitcoin has little to no correlation with gold and moves more closely in line with the S&P 500.

This year has been unusual in that both risk-on and risk-off assets have performed well. Gold is up 53% year to date, the S&P 500 has gained 16%, and Bitcoin is up 17%. All three have posted new all-time highs, with gold emerging as the clear standout. Its outperformance has been driven by ongoing macro uncertainty, from tariffs and interest rates to conflict in the Middle East. While gold has led the way, risk-on investors have been watching and waiting for capital to rotate back out of gold and into equities, and eventually into Bitcoin.

October showed early signs of that shift. As macro concerns began to ease, including progress on US-China trade tensions, signs of de-escalation in the Middle East, and clearer communication from the Federal Reserve, gold entered a correction. It retraced more than 10% from its all-time high in just over a week. At the same time, equity markets rallied to new highs, suggesting that capital is beginning to move back into risk-on territory.

But Bitcoin remained stagnant. Despite improving conditions, it spent most of the month trying to stay green. This is not unusual. Historically, the rotation begins with flows moving from gold into equities. Only once risk appetite fully returns do funds begin rotating into Bitcoin and the broader crypto space.

For most of the year, the macro environment has been mixed. Sentiment has been fragile and policy uncertainty has kept many sidelined. Yet despite all of this, Bitcoin remains up on the year and has posted several new highs, all without a major rotation into the asset.

Now, with geopolitical risks cooling, macro clarity improving, and Bitcoin entering its historically strongest month, the setup is there. November could be the point where the larger rotation finally moves into crypto.

October got off to a strong start. Bitcoin hit a new all-time high and was up 10% within the first five days, living up to the hype of ‘Uptober’. Momentum was building, and expectations were high. However, things quickly turned. After a brief period of consolidation, Trump announced new tariffs on China, and within minutes, $20 billion in open interest was liquidated. Bitcoin dropped from $117,000 to $102,000 in under 20 minutes.

The event shattered any bullish momentum. The rest of the month became a grind. Retail and institutional players largely stayed on the sidelines, while those caught in the liquidation cascade tried to leverage their way back in – and were wiped out again. Volatility remained high, but most daily moves reversed by the end of each session, creating choppy, directionless price action.

By 31 October, Bitcoin had failed to deliver on ‘Uptober’s’ promise. Despite setting a new all-time high early on, the month closed down 3.79%. There were multiple bullish attempts as sentiment began to turn – fuelled by the anticipation of an interest rate cut, optimism around a resolution in the US-China tariff standoff, and capital beginning to flow back in as gold corrected. But every rally attempt was knocked back by fresh headlines, the most damaging being Jerome Powell’s hawkish tone following the 25 basis point cut.

Still, throughout the month, we highlighted the broader opportunity. Weakness and underperformance created space to accumulate before what is historically Bitcoin’s strongest month – November. Over the past 14 years, nine Novembers have closed green, with an average monthly return of 40.5%.

While October ended in the bears’ favour, the bulls have built a foundation for a potential November breakout. The bullish fair value gap, which acted as deeper support, has now been filled and offered the relief needed to stabilise price action heading into the new month.

Looking forward, if we take the historical November average and apply a 40.5% increase from current levels, Bitcoin could rally towards $150,000. While that scenario remains statistically unlikely – with Kalshi giving it just a 6% probability – it aligns with the 2025 projections many had been making for months. If it were to happen, November would be the month to watch.

The macro backdrop is shifting. A resolution between the US and China now looks to be in place following a key meeting between Trump and Xi, which resulted in a trade deal. Interest rate uncertainty remains the main concern. With the US government still shut down, key data releases remain paused unless further exceptions are granted. However, there is growing expectation that the shutdown will end in November, potentially unlocking the economic data needed to guide the Fed's final rate decision in December.

Morgan Stanley Recommends Crypto Allocations:

On 5 October, Morgan Stanley's Global Investment Committee advised clients to allocate up to 4% of "opportunistic growth" portfolios and 2% of "balanced growth" portfolios to digital assets. This guidance, which impacts over 16,000 advisors managing $2 trillion in assets, marks a significant moment for institutional adoption. It reflects growing confidence from TradFi, especially on the back of Q3’s $3.9 billion in unrealised Bitcoin gains for firms like MicroStrategy. The move signals continued diversification into crypto as a potential hedge against inflation.

Interest Rate Cut and the Road Ahead:

We saw the second interest rate cut of the year take place, this time by 25 basis points, bringing the current target range to 4.00%–4.25%. The timing of the decision was complex. With the US government shut down throughout October and likely to remain so, key data the FOMC typically relies on was unavailable. An exception was made for CPI inflation data, but broader economic inputs were missing. Jerome Powell acknowledged that this made the policy decision more difficult, though the committee ultimately moved ahead with the 25 bps cut.

Markets had been split on whether we’d see 50 or even 75 bps of total easing between now and December. However, Powell’s hawkish tone during the press conference shifted expectations. His comment that “a further reduction in the policy rate at the December meeting is not a foregone conclusion” spooked investors. As it stands, markets are pricing in a 68% chance of a 25 bps cut in December, with a 32% chance of no change.

October’s Cryptocurrency ETF Momentum:

October was a breakout month for crypto ETFs. Bitwise launched its Solana Staking ETF, while Canary Capital listed both a spot Litecoin ETF and a spot Hedera ETF. Meanwhile, 21Shares filed for a spot Hyperliquid ETF. The uptick in both filings and listings, particularly across altcoins, continues to legitimise the sector and signals increased institutional interest beyond just Bitcoin and Ethereum. As the ETF landscape broadens, so does crypto’s foothold in traditional finance.

Top 10 cryptocurrencies by market cap

Here is the fast five of what you need to know about the market in October 2025:

Bitcoin fell by 3.79% in October
Ethereum fell by 7.64% in October
The top 10 remained unchanged from last month
Bittensor (TAO) was a standout performer of the month, up 38% for the month
The total crypto market fell by 5.50%

Video of the month

Charles Hoskinson Keynote at TOKEN2049 Singapore 2025

Education: The Painful Truth About Leverage

Now this may seem like a familiar topic, and it is, but it remains one of the most important lessons in this market. Unfortunately, it is also the one most traders seem determined to ignore until it is too late. The consequences are rarely small. Portfolios get wiped, capital evaporates, and lessons are learned in the most unforgiving way possible.

This month was a sharp reminder of that reality. Over $20 billion in open interest was flushed out of the market in a single day. That figure is not a typo. It was one of the largest liquidation events we have seen in recent memory, and it unfolded fast. Overleveraged long positions were caught completely offside, with cascading liquidations driving prices down across the board and wiping out billions in unrealised gains.

Events like this show exactly why we continue to push the message of buying spot and keeping leverage to a minimum. It is not about being risk-averse. It is about understanding that leverage adds a layer of complexity that most are not equipped to manage. It amplifies your exposure, but also your risk, your margin for error, and your emotional response. In markets as volatile and fast-moving as crypto, that is a dangerous cocktail.

Using leverage means you are not just predicting direction. You are predicting the timing, the size of the move, and the reaction of other participants. You are betting against time, liquidity, volatility, and even platform stability. All of those variables can turn against you in a flash. And when they do, they do not just dent your PnL. They close your positions and leave you sidelined.

A sharp wick down can liquidate a well-placed long before the market even bounces. A funding rate spike can skew your entry. A flush in open interest can trigger a domino effect that wipes out hundreds of millions in positions. These are not rare events. They are baked into how the market functions.

The hard truth is that most traders simply do not need leverage. If you are bullish, buy spot. If you believe in an asset, hold it. Building wealth in this space does not require 10x or 50x leverage. It requires patience, capital preservation, and a clear head. The obsession with maxing out position size is what gets people rekt. You only have to get it wrong once.

We broke all of this down in our Thunder Trading article earlier this month. If you missed it, we are including it again here. It walks through the mechanics of what happened, why it happened, and how you can avoid becoming part of the next liquidation wave. We do not rehash content unless it matters. And this one matters.

Too many people lose too much money learning this lesson after the fact. Do not be one of them.

Stormrake returns to the Australian Crypto Convention

We’re thrilled to be sponsoring the Australian Crypto Convention in Sydney on 22 and 23 November. As a sponsor, we’ll have a dedicated booth at the event and invite you to come by, meet the team.

Our Director and COO Bisher Khudeira will be there alongside members of our senior team including our Senior Brokers, Senior Trader, and Senior Analyst, ready to connect and talk all things crypto.

The Stormrake booth will feature a popcorn machine for a quick snack and a live DJ booth to keep the energy high. Contact your Stormrake Broker for details and to secure your ticket.

We look forward to seeing you there.

Written by Alexandar Artis

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