GM. This is Milk Road PRO, aka: your portfolio’s life coach.
Just a month ago, the bears were yelling “Is that the top?” and rolling out their usual doomsday scripts.
Now? The mood has flipped.
Suddenly, everyone’s hyped about Uptober. And we’re only 4 days in. 🤣
That’s how wild this market gets.
One burst of price action and the crowd jumps from fear to full-on FOMO.
But let’s be real — it’s easy to get lost in the noise. That’s exactly why we’re here.
We’re cutting through the hype and tuning into the signals that actually matter.
We want to believe in Uptober too, but we’re not here for blind hope. 🤔
This report zooms in on the crypto market to get a real feel for where things actually stand. It's all about reading the pulse, not chasing the headlines.
Now, if you’re also into the macro picture, don’t worry — a full Macro PRO report is dropping tomorrow, packed with 50+ charts.
We got an early look, and yeah… it’s a banger. 👏
It lays out a thesis that stretches way beyond October, but no spoilers.
That macro view sets the stage for how we analyze crypto.
It gives us the lens we need to spot new trends, find real confirmations, and question our own biases.
It all ties together. And honestly, that’s what portfolio managers are supposed to do — we’re just doing it with fewer buzzwords and more curiosity.
Alright, enough intro. Let’s get into it.
The Business Cycle
The business cycle is the foundation of how we understand the trend and direction of markets – if you’re new here, you can learn more about how the business cycle impacts crypto markets here.
The chart below shows the ISM, which gives us a pretty solid clue about where we are in terms of economic activity right now.
We’re generally expecting ISM Manufacturing PMI to rise moving forward.
Everything is currently pointing towards a business cycle upturn.
That said, the intense focus many people have on one particular business survey (ISM PMI) is probably not that helpful. There's a chance it's not a particularly good measure of where we are in the business cycle anymore.
We’re going to go into this in much more detail in the Macro PRO report due on this Sunday, but in the meantime, we expect the cycle and the ISM to accelerate.
Let’s check if global liquidity is also lining up to support that potential next leg higher.
Global liquidity
Global liquidity tells us how much capital is flowing into the markets. And generally, the more liquidity — or the faster it’s rising — the better it is for risk-on assets like crypto.
Over the last couple of months, the US Treasury has been refilling its general account. At first, we weren’t sure how big an impact this would have. This is because it depended a lot on how they did it and how long it would take to do it.
They pulled out around half a trillion dollars of liquidity from the market in a pretty short period. This obviously slowed things down a lot from a liquidity perspective.
Now that the Treasury General Account has been refilled, that huge drag on liquidity is gone.
This is very bullish, and we expect this to allow liquidity to expand and asset prices to rise.
Truflation
Instead of looking at traditional trailing inflation metrics, we’re turning to Truflation for a real-time view of what’s actually happening on the ground.
Inflation remains a concern. The Fed is watching this closely, and so are we.
Even though there is a risk of inflation rising again, it remains below levels that would cause concern and possibly lead the Fed to pump the brakes on the bull run.
As long as this remains somewhat stable and doesn’t spike up too high, we expect the bullish momentum to continue.
No major concerns here! So, in short, the macro picture looks good.
PERFORMANCE
Let’s see how some major investment classes have been performing.
Gold continued its strong run, gaining 9% and outperforming all other assets.
Crypto saw some late-month volatility but still finished the month with a solid 6% gain, similar to the Nasdaq. The broader S&P 500 also delivered positive returns, up 4%, though it lagged behind the others.
We expect crypto and the Nasdaq to outperform the broader index over the next couple of months, as market sentiment turns more risk-on.
In such an environment, investors are likely to favor tech and disruptive sectors over defensive names like Costco, Walmart, or Coca-Cola.
Let’s take a look at what’s been moving the crypto market over the past month.
To get a clearer picture of what did well and what didn’t over the past month, let’s check out the top gainers and losers.
Top gainers
Notice we’re only looking at the top 100 tokens by market cap. That way, we filter out the flood of tiny new memecoins that shoot up thousands of percent every month.
Pump was one of the big stories in September — it nearly 4x’d before pulling back.
Another one worth watching is Worldcoin, which we also cover in this report.
What sparked the move? You guessed it — the announcement of World DAT. We’ve been pointing out for a while now that these flows are now playing a big role in driving the market.
And then there’s Avalanche, which seems to be going through a bit of a renaissance. Its onchain activity is picking up fast. Plus we are pretty sure there was a DAT announcement behind that too.
It does make us wonder: how long before DAT announcements stop being pump triggers and start becoming just another news item?
Because at the end of the day, it all comes down to the actual product or service behind the token. If the fundamentals aren’t there, no DAT hype will carry it long-term.
Alright, time to check out the losers.
Top losers
We spotted two interesting things in the losers list.
First, two Trump-related tokens (WLFI and TRUMP) made the cut.
Does it mean anything? Probably not. Does Trump care? Definitely not.
So yeah, no clue where this goes next.
Second, we’ve got three DeFi tokens down bad — UNI, ENA, and AAVE.
That could be a signal to rethink our bullish stance on DeFi…But honestly, we’re not too worried.
UNI is a bit of a red flag — an $8B valuation, no revenue, and losing market share. But it’s not in our portfolio, so no stress there.
As for Ethena and Aave? We’re still confident. We believe DeFi’s real breakout moment hasn’t happened yet — but when it does, it’ll be big.
So not a ton of insights from this list — more noise than signal. Let’s see if some of the other charts have a bit more to say.
Crypto Breadth
Here, we can see how many crypto tokens out of 200 are currently in an uptrend based on the 50-day and 200-day moving averages.
Source: Milk Road Research Hub
At the start of the month, both moving averages were on the rise. But after the recent pullback, the shorter one dipped into more bearish territory.
Right now, only 24% of the top 200 coins are trading above their 50-day moving average. On the brighter side, the longer-term 200-day average is holding steady, with over 60% still above it.
The bigger the picture you look at, the more positive the trend appears.
We don’t expect that longer-term outlook to shift much — in fact, we think the number of coins above the 200-day average will likely climb from here.
That’s mainly because we believe this was the final dip before the next move higher.
Now let’s take a look at how the broader market is performing compared to Bitcoin.
Uh, Oh… 😧 The rest of this report is exclusive to Crypto PRO members!
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WHAT’S LEFT INSIDE? 👀
- Why the altcoin index’s current rise isn’t all its cracked up to be
- Why certain traders are betting against $ETH after its rise (and why they may be in for pain)
- How we’re spending this month’s $1,000 allocation – and the portfolio asset we just sold out of
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