The entire cryptocurrency market was affected by the Fed's remarks last week and prices fell back. Bitcoin once fell from $64,000 to $60,000, and then rebounded to $62,000 after the US economic data exceeded expectations. The weekly decline was still about 6%. On the other hand, after Ethereum finally caught up, the weekly decline widened to 11%, returning to the original starting point.
In addition to the overall economic impact, the current outflow of speculative funds from the United States to China and Japan is also a major factor.
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Fortunately, the overall economic data of the United States last week was very good. Even though the manufacturing index is still sluggish, the job market performed very well, which means that as long as the Fed continues to cut interest rates, the US economy has a high probability of achieving a soft landing. Since this is an important moment for the Fed officials to leave a historical position of "soft landing in the post-inflation era", the Fed will not ignore the recession risk of a high interest rate environment.
I think there will be more precautionary rate cuts coming, which will help the crypto market to consolidate and rise.
Looking back at past experience, Bitcoin often performs well in the fourth quarter of a bull market cycle, especially after the halving event, and this year will perform just as well. However, the current growth in Bitcoin demand is still slow. If the price increase is to be driven and maintained in the fourth quarter, the overall market demand must accelerate.
Further analyzing past trends, historically in the halving years of 2012, 2016, and 2020, the corresponding Bitcoin prices rose in the fourth quarter. Assuming that this time is similar to past experience, the trend of Bitcoin in 2024 is similar to that in 2016 and 2020, which indicates that the price may rise in the coming months.
But we cannot completely use historical data to estimate the future, just like it is said that September in history will fall, but it rose for a month. The difference between 2024 and 2020 is that the latter encountered the Fed's zero interest rate easing policy, and it was natural for it to rise. This year, Bitcoin was at the crossroads of bull and bear markets when it entered the fourth quarter, while 2020 was an obvious ultra-loose bull market. However, this year is about to enter the Fed's interest rate cut cycle. From a probability point of view, Bitcoin will rise in the future with the interest rate cut cycle.
As the National Day holiday comes to an end, traders are beginning to deploy their capital positions. The crypto market, which saw net capital outflows last week, has regained the favor of capital, causing Bitcoin to rise from $60,000 to $63,500. Due to the impressive U.S. economic data last week, capital is likely to begin to flow back from China to the U.S., which will also drive up the price of the cryptocurrency market. Some funds have already begun to shift from stablecoins to Bitcoin and other small and medium-sized cryptocurrencies.
After the decline in September, October is a good starting point. This week, the focus includes the Consumer Price Index (CPI) on October 10, the number of unemployment claims, and the Consumer Confidence Index on October 11.
Recently, short-term holders (who have held Bitcoin for less than 155 days) have increased their risk or increased their purchases, indicating a significant increase in buying activity, which means that investors are more optimistic about the market and have begun to buy Bitcoin again. Subsequent US economic data will affect investors' bets on the US economy. Although the current data looks good, it still depends on how the market interprets it.
It will take at least one or two times for the aunties to clean up the market before a real bull market comes. Now is the time when the aunties are entering the market frantically, and there is no immediate sharp correction. However, there is no need to be too miss the pump to miss the opportunity. When the aunties are trapped, you can consider whether to enter the market based on the current situation.
As long as the general trend has not changed, we just need to remain patient, watch more and act less. The good thing is that the ETH/BTC exchange rate has rebounded slightly recently, but the increase is far from enough, and the strategy is mainly to hold.
Later, I will bring you analysis of leading projects in other tracks. If you are interested, you can click to follow. I will also organize some cutting-edge consulting and project reviews from time to time. Welcome all like-minded people in the crypto to explore together.
I plan to accept two more one-on-one classes at the end, but I won’t accept any more. To be honest, I can’t handle too many. After all, my energy is limited.
Currently, there are basically no good opportunities for BTC investors to get on board Ethereum. The focus is to lay out high-quality copycats in the later stage and strive to achieve an overall return of no less than 10 times this year.
If you are fully invested or your position is heavy and you don’t know what to do, you can contact me to help you see if your position needs to be adjusted.
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