Author: Climber, Jinse Finance
The crypto market has recently shown signs of recovery, with the BTC price continuing to rise and approaching the $70,000 mark on several occasions. As the last quarter of the year, a large portion of altcoins are still trading at the levels of last year's bear market.
Currently, the probability of Bitcoin reaching $70,000 this month on Polymarket has risen to 74%, and the total net inflow of Bitcoin ETFs has exceeded $20 billion for the first time last week. Additionally, there are various signals in the market indicating that Bitcoin is about to embark on a new round of upward momentum.
However, the crypto market is always unpredictable, and there are still negative factors and bearish views. QCP Capital stated that with the US election approaching, the uncertainty in the BTC market is increasing. Therefore, Jinse Finance has sorted out the recent assessments of the crypto market and the potential positive and negative factors, in order to provide readers with a clearer understanding of the crypto trends.
Positive Factors
Keywords: Interest rate cut, election, increased holdings
Lisa Shalett, Chief Investment Officer of Morgan Stanley Wealth Management, stated that the Federal Reserve, focusing on the labor market, will continue to cut interest rates. The Fed is now concerned about the "mixed" labor market, and will continue to cut interest rates in November, but policymakers are being cautious as inflation is no longer cooling rapidly.
On October 17, Polymarket data showed that the probability of Trump winning the US presidential election has risen to a record high of 61.3%.
10x Research stated that the rise in MicroStrategy's stock price may continue, which could drive up the price of Bitcoin. Over the past week, the stock has risen 16%, reaching a market capitalization of $43 billion, a new high. In addition, strong bond demand may prompt MicroStrategy to raise more funds to purchase Bitcoin. He said that the strategy of borrowing to buy Bitcoin is reasonable, and the rise in stock prices may form a positive feedback loop, further pushing up the price of Bitcoin.
CryptoQuant's data shows that the surge in stablecoins and Bitcoin trading may provide a basis for BTC's upward trend in the coming weeks. At the end of September, stablecoin liquidity continued to grow to a record $169 billion, up 31% year-to-date (YTD). The dominant one is still Tether's USDT, whose market capitalization has increased by $28 billion to nearly $120 billion, accounting for 71% of the market share.
Goldman Sachs Trading Department: It is expected that the S&P 500 index will rise to 6,270 points by the end of the year. Historical data from 1928 shows that the median historical return of the S&P 500 index from October 15 to December 31 is 5.17%. In election years, the median return is even slightly higher than 7%, implying a year-end level of 6,270 points.
K33 analyst: Bitcoin futures premium has risen to a 5-month high, indicating that institutional preferences are leaning towards increasing long positions.
CryptoQuant analyst stated that the monthly growth rate of Bitcoin demand has reached a new high since April, suggesting that Bitcoin demand seems to be recovering.
a16z crypto report: The number of active cryptocurrency addresses and usage rates have reached historic highs. As of September, there are about 617 million global cryptocurrency holders, with 60 million monthly active users. By 2024, the number of monthly active cryptocurrency addresses will exceed 220 million, with Base leading the Ethereum EVM chain with 22 million addresses, and Solana dominating the non-EVM chain with over 100 million addresses. This year has also seen the highest number of mobile wallet users, with the US accounting for 12% of global users.
On October 17, the total net inflow of Bitcoin ETFs exceeded $20 billion for the first time.
Matrixport: Cryptocurrency mining stocks have underperformed, and Bitcoin spot ETFs may be the best investment strategy. MicroStrategy's strategy of borrowing to purchase Bitcoin has clearly outperformed other crypto assets. This positive trend may continue to provide support for the Bitcoin price.
South Korea may soon allow Bitcoin spot ETFs, as the Financial Services Commission (FSC) will take important steps to shape the country's cryptocurrency landscape, including discussing the approval of Bitcoin spot exchange-traded funds (ETFs) and allowing companies to open cryptocurrency exchange accounts.
Bullish:
Standard Chartered: Before the US presidential election in November, Bitcoin may reach $73,800, an increase of 12% from the current level.
NYDIG: Bitcoin's performance is completely in line with the levels of the previous two cycles, and Q4 may be the best performing quarter.
Analyst: The upward momentum of Bitcoin is strong, and it is expected to break through $70,000 in a few weeks
Glassnode: The recent decline in Bitcoin has been relatively mild, consistent with the historical bull market pattern
Zerocap Chief Investment Officer Jonathan de Wet stated in an investor report that the upward momentum of Bitcoin remains strong, and it is expected to break through $70,000 in a few weeks, and pointed out that the technical breakthrough provides a solid foundation for further upward movement.
QCP Capital: The prices of crypto assets are positively correlated with the probability of Trump's victory. Additionally, QCP expects that as global central banks enter an interest rate cut cycle, market liquidity will increase, driving the rise of risk assets. The European Central Bank is expected to cut interest rates by 25 basis points tomorrow, the People's Bank of China will continue to maintain a loose stance, and the Federal Reserve is expected to cut interest rates twice this year and four times by 2025.
Santiment: After BTC broke through $66,000, the market is gradually becoming more optimistic. Traders are looking for opportunities in the GameFi and Meme coin sectors, and the increased discussion rate in these altcoin sectors indicates a sustained rise in interest levels.
CryptoQuant: Against the backdrop of declining US bond yields and rising gold prices, Bitcoin has upside potential. As the 13-week US Treasury yield has declined, gold has risen by nearly 5%, and Bitcoin may also benefit from this trend.
Top trader Eugene: Stopped shorting and turned bullish. Closed short positions, and the open interest in Bitcoin contracts has disappeared as BTC's price has risen, so he has flipped to a long position.
Victory Securities: Bitcoin is gradually rising, waiting for the spillover effect, the weak balance in the market has been broken, and short-term holders are gradually increasing their holdings, the recovery stage may be about to begin.
10T Holdings founder: The US election result will not prevent Bitcoin from reaching $100,000.
21Shares analyst: CPI data will have a "favorable impact" on Bitcoin prices, as borrowing costs will decrease. We expect market flows to recover after the recent geopolitical tensions disrupted the financial landscape.
DWF Labs partner: The crypto market is in the process of recovery, no need to worry.
Negative Factors and Bearish Views
Keywords: Sell-off, regulation, geopolitics
On October 16, Arkham Research found that Tesla has transferred 11,509 Bitcoins (worth about $770 million) to a new address, which appears to be the company's entire Bitcoin reserve. These transfers were made within the past hour, and prior to the transfer of these tokens, Tesla conducted six test transactions, which is the first time Tesla has interacted with its Bitcoin wallet since the company sold most of its assets in 2022.
The company invested $1.5 billion in Bitcoin in February 2021, but the purpose of the current transfer is unclear, and some community members believe the company may be preparing to sell. Tesla will report its third-quarter financial results after the market close on October 23.
The CEO of CryptoQuant stated that if Tesla sells Bitcoin, the impact will be slightly higher than half of the German government's.
The US Supreme Court has refused to hear the appeal of Battle Born Investments and others regarding 69,370 Bitcoins (worth $4.4 billion) related to the Silk Road, meaning these Bitcoins may be auctioned off soon.
QCP Capital: Geopolitical risks, especially the conflict between Iran and Israel, are the biggest hidden dangers before the US election.
Fed's Kashkari: Bitcoin has existed for more than a decade, but it is still completely useless.
The situation on the Korean Peninsula continues to escalate. On October 15 local time, North Korea blew up sections of the Gyeongui Line and East Sea Line roads connecting North and South Korea north of the military demarcation line. Subsequently, the South Korean military responded with retaliatory fire.
Trader Peter Brandt: Bitcoin's bull runs often occur in the latter half of the halving cycle, and the market trend shows potential downside risks. Bitcoin has not set a new high in 30 consecutive weeks, and historically, similar situations have typically led to price declines of more than 75%. He also warned that if Bitcoin falls below $48,000, his analysis will be invalidated, and the market will need to be reassessed.
Galaxy: Crypto venture capital has cooled, with investment amounts down 20% quarter-over-quarter and transaction volumes down 17% in the third quarter. The crypto industry has received $8 billion in investment so far this year, and investment is expected to be slightly higher in 2024 than in 2023. Compared to the over $30 billion investment levels in 2021 and 2022, the current market enthusiasm has clearly declined.
Trump's economic advisor: A potential new government will support a strong US dollar and may restrict the rise of cryptocurrencies.
IntoTheBlock data shows that the total amount of high-risk loans (defined as loans within 5% of the liquidation price) rose to $55 million on Wednesday, the highest level since June 2022. Loans within 5% of the liquidation price mean that if the collateral price drops 5%, it will no longer cover the loan, triggering a liquidation.
Summary
The current BTC price is continuously challenging historical highs, and the market sentiment is predominantly bullish, but most Altcoins are still seeing limited gains. Among the major sectors, the one with the strongest wealth effect is Meme coins, while the narratives of others appear to be weakening. Therefore, the overall crypto market bull run may still face significant challenges.
