• FTX launched a $1.6B stablecoin payout, adding liquidity but not sparking bullish confidence.
• USDT supply expands by $6B, yet capital stays risk-off with heavy late-September outflows.
• October’s seasonal edge offers hope, but markets remain cautious amid falling rate-cut odds.

FTX creditors are once again lining up for repayment, this time for $1.6 billion in stablecoins. The bankrupt exchange confirmed September 30 as the start date for the third distribution round. Eligible creditors will collect funds through BitGo, Kraken, or Payoneer. While this payout falls short of May’s $5 billion flood, traders still see potential. With October’s seasonal patterns approaching, the market now wonders if this cash flow can lift sentiment.

Liquidity Drops Into an Unsteady Market

FTX’s latest injection arrives during a fragile period for digital assets. September has been marked by fear, with the Fear and Greed Index slipping to 40, a four-month low. That mood has kept many investors on the sidelines, unwilling to dive back into risk-heavy positions. Stablecoin flows reflect the same caution. Tether recently minted $6 billion, raising supply to $174 billion. Yet the increase did not feed into sustained buying.

Instead, $1.7 billion in Tether — USDT left markets on September 25, the largest outflow since April. This wave of withdrawals highlights a preference for caution over conviction.Meanwhile, traders remain wary of repeating June’s bearish slide. Back then, large-cap coins lost support during the first week, shaking confidence across the board.

The current setup seems similar, with the crypto market lacking direction and volatility looming on the horizon. Seasonal strength may offer some protection, but the safety net appears thin. FTX’s payout does provide a short-term liquidity patch. More capital flows into the ecosystem, offering traders breathing space. However, patches do not repair structural cracks.

Can October’s Tailwind Carry the Market?

Optimists point to October’s history as a supportive month for digital assets. Seasonal trends often favor recovery during this period, sparking hope that liquidity and timing may align. Yet, fundamentals tell a different story. Rate-cut expectations dropped last week, with probabilities sliding to 89.3% from 91.9%. That slight dip signals uncertainty in macro conditions.

The market still has little enthusiasm for risk, and in the absence of a clear trigger, new money can just go around without generating positive reactions. The feeling at the center of the conflict is like it were a tug-of-war between seasonal optimism and market caution. Bulls are among those waiting for the $1.6 billion injection to reignite positive sentiment.

On the contrary, the bears claim that the fundamental problems are so deep that any upward reaction will be temporary. The mood is still fragile, and the only thing that is certain is the volatility. At the moment, the stablecoin payout appears more like a temporary solution to the problem rather than the beginning of a rally.