Author: Shang2046
The market, project, and cryptocurrency information, opinions and judgments mentioned in this report are for reference only and do not constitute any investment advice.
BTC is expected to end the longest high-volatility period in history, and maintaining patience is the best strategy to welcome the second half of the bull market.
Market this week
This week, BTC opened at $62,811, and as of the early morning of October 14, it hovered around $62,500, recording a weekly Doji with a range of nearly 9%. On Monday afternoon, BTC quickly surged to around $64,500, and then broke through the 66,000 mark in the evening.
Ignoring the rapid movement on Monday, BTC's overall performance this past week has continued the relatively weak trend since entering October. This is consistent with the net capital outflow from the crypto asset world in October. During the same period, the monetary policies of the two superpowers, China and the United States, have undergone huge changes, which has also had a certain impact on BTC. On September 23, China issued what may be the most intense market rescue policies for the stock market and real estate industry in history. The market tends to believe that this is related to the US Federal Reserve's 50-basis-point rate cut the previous week. Within two weeks after China's market rescue policy, the US subsequently announced strong employment data and relatively neutral inflation data, and the market quickly changed its expectation of the Fed's continued 50-basis-point rate cut to 25 basis points, and some institutions even believe that no rate cut is possible. This has cast a slight shadow on BTC, which is negatively correlated with the US dollar. BTC's recent bull market is highly correlated with the US stock market, especially the Nasdaq, and as the spot ETF is directly linked to the two, the recent market performance is also highly related to the capital inflow and outflow of the ETF. A recent article by BlackRock pointed out that the market tends to compare BTC to US tech companies, but this clearly misunderstands the special asset attributes of BTC. In the medium and long term, the situation of BTC being "dragged" by the US stock market must be broken out of. Looking back to the crypto asset world, after 7 months of high-volatility adjustment, BTC has established solid support in the current range, and the chips have also been fully washed, so once the second half of the bull market is launched, it will see rapid development.
Federal Reserve and economic data
On October 10, the US announced a CPI year-on-year rate of 2.4%, slightly higher than the expected 2.3%. On October 14, the US announced that the number of new jobs added in September was 2.54 million, higher than the expected 1.47 million, and significantly revised the employment data for July and August. The continued escalation of conflicts in the Middle East has also increased the risk of inflation rebounding. As Fed officials continue to turn hawkish, the market has ultimately lowered the extent of rate cuts this year, with the current highest FedWatch probability being two 25-basis-point rate cuts. Accompanying the decline in the extent of rate cuts within the year, the US dollar index has rebounded strongly, rising to 102.89. Currently, the various parties in the market are gradually pushing the stock indexes to rise slowly under the expectation of a "soft landing", with the Nasdaq approaching its previous high, and the Dow Jones and S&P 500 reaching new highs. After adjusting, gold has started to stabilize and rebound, with London gold rising 0.17% for the week. The bond market has seen a sell-off again, with the 2-year yield rising to 3.953% and the 10-year yield rising to 4.073%.
Stablecoins and ETFs
This week, capital has shown an overall outflow, with a loss of $330 million, mainly due to the withdrawal of funds from the USDC channel. Specifically, USDT saw an inflow of $65 million, while USDC saw an outflow of $750 million, resulting in a significant net outflow of $687 million from the stablecoin channel. The ETF channel contributed positive capital inflows, with two of the five trading days recording significant inflows, resulting in a net inflow of $357 million for the week. The significant outflow of on-chain capital is the main reason for BTC's re-break below $60,000 this week, but the buying of the ETF channel under the support of the Nasdaq's rise has allowed BTC to recover to the $63,000 level after falling below $60,000. The rapid breakthrough on Monday is also directly related to the $470 million inflow to the ETF on the 14th.
Supply analysis
After a brief "short-to-long" movement the previous week, this week saw a return to "long-to-short" movement. We previously analyzed that the second round of chip distribution by long-term holders after re-accumulating positions is one of the main signs of the start of the second half of the bull market. The cost basis of short-term investors is currently around $62,500, with the largest chip accumulation price at $61,800. The BTC balance on exchanges has remained at a low level, within 3 million.
BTC on-chain data
The change in new addresses is not much, Transactions have increased, active entities and transfer value have risen, entering an expansionary phase in the medium term. Bitcoin mining power is operating near historical highs.
Ecosystem analysis
The active addresses and new addresses in the Ethereum ecosystem have entered an expansionary phase, with Transactions reaching a new high, driven by Layer 2 Base.
Solana's new addresses and Transactions have remained at high levels, with the 30-day average reaching a new high, and active addresses remaining at historical highs.
Cycle indicators
The EMC BTC Cycle Metrics indicator is 0.25, and the bull market signal is awaiting further activation.
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