TechFlow news, October 21 — Chloe (@ChloeTalk1), author of the HTX DeepThink column and researcher at HTX Research, analyzed that the current crypto market is influenced by three factors: macroeconomic policies, regulatory developments, and investor sentiment. The U.S. federal government has shut down due to Congress's failure to pass an appropriations bill since October 1. For 16 days, the Senate’s tenth attempt to advance a temporary funding measure still failed to reach the 60-vote threshold. This means the shutdown will continue, and most economic data releases will be paused. However, the Bureau of Labor Statistics stated it would still release September's CPI on October 24 to meet the annual adjustment needs for Social Security benefits. This report will be the only significant data before the Federal Reserve's October 28–29 FOMC meeting, where investors almost unanimously expect another 25-basis-point rate cut. Fed Chair Powell indicated that balance sheet reduction “could be nearing its end in the coming months,” and noted rising repo rates and other signs of tightening liquidity, reinforcing market belief in further monetary easing.
With midterm elections approaching, crypto voters are emerging as a pivotal group. A survey of 800 digital asset investors found that 64% consider candidates’ crypto positions “very important.” Though registered as Democrats, this group tends to vote Republican in congressional races and supports rolling back Biden-era regulations. They are primarily young, diverse, college-educated individuals, with over one-third from the southern United States. Influenced by this trend, companies including Ripple and Coinbase held a roundtable with Democratic senators this week to push for crypto ETF legislation, chaired by Senator Gillibrand. Reports indicate Republicans have proposed bills clarifying jurisdictional boundaries between the SEC and CFTC, while Democrats focus on cracking down on illegal activities in decentralized finance; legislative progress may be delayed until after the 2026 elections.
Options markets show a clear bullish bias: call options account for nearly 60%, with open interest of about 246,000 BTC, versus 165,000 BTC in puts. Total open interest is near all-time highs, concentrated on December 26 expiry strikes at $140,000, $200,000, and $120,000. Among short-term contracts, calls at $124,000 and $128,000 expiring October 31 lead trading volume, while $108,000 puts expiring October 24 are used for hedging. One-week at-the-money implied volatility has risen from 30% to around 40%, yet monthly volatility increased by only about 2.5%, suggesting the market expects a relatively orderly upward move.
In summary, the government shutdown creates a data vacuum, but the Fed’s dovish stance and the likely end of quantitative tightening continue to support risk assets. Midterm election dynamics and regulatory uncertainty encourage institutions and retail investors to position early, fueling strong bullish sentiment in options markets. However, if CPI comes in higher than expected or the shutdown further drags on the economy, short-term volatility could intensify.
