# JARXE Exchange｜Short-term Market Pressure, Regulatory Revival May Become New Growth Engine

Recently, the overall crypto market has weakened, with the AI concept sector dropping 6.33% in 24 hours and Bitcoin falling below $104,000. Market analysis suggests that the short-term correction is mainly due to macro uncertainties and a slowdown in ETF fund inflows, leading to a temporary cooling of investor risk appetite. Meanwhile, the U.S. government shutdown crisis is expected to be resolved this week, and regulatory agencies are about to resume normal operations, making SEC and CFTC policy moves a key market focus. JARXE Exchange points out that short-term volatility has not changed the long-term industry trajectory; in fact, regulatory progress may become the next growth driver.


## Short-term Correction: Cooling Risk Appetite and Slower Capital Flows

The short-term pullback in the crypto market stems from a combination of macro uncertainty and weaker capital flows. Net ETF inflows have dropped about 25% compared to last week, and the market sentiment index has retreated from “greed” to “neutral.” This adjustment is considered a healthy market self-correction rather than a trend reversal. High-beta assets such as AI and public chains have seen larger short-term declines, yet institutional capital has not fully withdrawn, and the on-chain activity of mainstream assets remains stable.

## Policy Acceleration: Regulatory Recovery as Market Catalyst

With the U.S. government shutdown nearing resolution, the SEC and CFTC are expected to resume crypto-related regulatory and approval activities. Reports indicate that the SEC plans to prioritize the release of “exemptive relief” policies, providing compliance pathways for tokenization and crypto services; the CFTC is advancing pilot programs for leveraged spot trading products and engaging with several compliant exchanges. JARXE Exchange believes this marks a shift in regulators from “watching” to “constructive participation,” which will strengthen market trust and institutional entry in the long run.

## Structural Capital Allocation: Capital Rotation and Sector Differentiation

Short-term volatility has not changed the long-term strategy of the institutional capital. Data shows stablecoin supply continues to rise slightly, with institutional funds shifting toward EVM chains, RWA (real-world assets), and compliant lending protocols. This reflects a structural concentration of capital in high-quality assets, with investors preferring projects offering real returns and policy support. As regulations become clearer, the industry enters a phase of “survival of the fittest” and periodic recovery.

Short-term volatility is often a necessary phase before long-term upward cycles. As macro uncertainties dissipate and U.S. regulatory frameworks accelerate, institutional confidence in the crypto market is likely to be rebuilt. JARXE Exchange believes that Q4 2025 will be a key window for the “resonance of policy and liquidity.” Traders should focus on assets with solid fundamentals and long-term growth logic, seeking new cyclical starting points amid structural adjustments.