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.
Before November 6, the United States will face a series of key data releases, the second rate cut meeting of the year, and the US presidential election. Amid these uncertainties, BTC has once again reached a breakthrough point in its historical high.
Market Summary
This week, BTC opened at $69,014.87 and closed at $67,943.19, down 1.55% for the week, with a volatility of 6.30% and decreased trading volume. This week's BTC market performance can be understood as a technical confirmation of the previous sharp rebound, following the decline of the US stock market. However, what awaits both the US stock market and BTC may be the most crucial 10 days in US history.
Over the next 10 days, the US will successively release the quarterly US bond sales volume, non-farm employment data, Q3 GDP, and the PCE price index. November 5 and 6 will be the unveiling of the US presidential election and the penultimate interest rate meeting of the year.
Over the past month, with the strong US economic data and the neutral bias of the employment data, US bond prices have continued to fall, indicating that the market has further reduced its expectations for rate cuts.
If Trump is re-elected, mainstream institutions predict a combination of expansionary fiscal policy and contractionary monetary policy, leading to a strong US dollar, a strong economy + high inflation and high interest rates, as well as greater "unpredictability" due to Trump's own style.
For BTC, the slowdown in rate cuts and the strong US dollar are negative factors; high inflation is a favorable factor for its hedging properties; Trump and the Republican Party's friendliness towards the crypto world is a long-term positive. This world is like this, not simply linear. The contradictory external factors as a whole constitute a short-term neutral and long-term positive external environment.
In this case, the internal structure of BTC becomes more important. The good news is that the on-chain structure of BTC remains relatively stable, preparing the market for a sustained rebound. The focus of the future market will still be on the performance of the US stock market. As the election approaches, the US stock market may experience some volatility, with a focus on the earnings reports of the 7 tech giants and the risk appetite of the capital after the election is determined.
Federal Reserve and Economic Data
Continuing the previous rhetoric, Federal Reserve officials' statements have focused on "supporting cautious, gradual, and slow rate cuts". The Federal Reserve seems to be creating a narrative that rate cuts will continue, but differently from the expectations formed by the first rate cut, and the market will bear a higher CPI next year, and the rise in the neutral interest rate is inevitable. The CME Fed Watch shows a 96.3% probability of a 25 basis point rate cut in November.
The US dollar index rose another 0.88% to 104.33, rising for the 5th consecutive week, putting continued pressure on various markets.
The US bond sell-off continued, with prices falling and yields rising, with the 2-year and 10-year yields rising to 4.107% and 4.232% respectively. Gold in London rose another 0.89% to $2,745.
The Dow Jones Index and the S&P 500 ended their two-week winning streak, falling 2.68% and 0.96% respectively. The Nasdaq continued its winning streak, achieving a 7-week winning streak, reaching a new all-time high intraday, but with a gain of only 0.16%. Tesla reported better-than-expected earnings this week, and the stock price surged 22% the next day. Next week, Apple, Microsoft, Google, and others will release their earnings reports, which may be a key factor in whether the Nasdaq continues its upward trend.
Liquidity and Supply Analysis
Continuing the inflows of the previous week, capital inflows this week were $827 million, less than the $2.52 billion of the previous week.
BTC ETFs remain the protagonist, with a net inflow of $1 billion, while the stablecoin channel saw an outflow of $169 million. As of now, US spot ETFs have accumulated a net inflow of $21.5 billion, with a total holding of 983,600 BTC. At the current inflow rate, the 1 million BTC mark will be broken around the time of the US presidential election. It is worth noting that according to EMC Labs' monitoring, the average buy-in cost of the ETFs is $59,500.
Among stablecoins, USDT and USDC saw divergent inflows, with USDT seeing an inflow of $135 million and USDC continuing a significant outflow of $300 million. USDC has seen a large outflow for 3 consecutive weeks, but the outflow scale is decreasing. It is not yet clear whether the outflow of the compliant US dollar stablecoin USDC is related to the recent strength of the US dollar and the reduced expectations of rate cuts.
On the supply side, the long-term investor position reduction that started 2 months ago has temporarily stopped, with a slight increase. Correspondingly, short-term investors have also reduced their positions slightly. But it is not enough to form a trend. The cost basis of short-term investors is $63,500, with a profit of about 5%.
Ecosystem Analysis
BTC's new addresses, active addresses, and value transfer scale have remained at low levels. Transactions have declined slightly.
Ethereum's new addresses and active addresses have declined slightly, while Transactions have reached a new high (from Base).
Solana has continued to maintain strong vitality, with new addresses, active addresses, and Transactions all reaching new highs.
Cycle Indicators
The EMC BTC Cycle on-chain data engine shows that we are still in the consolidation phase of the bull market acceleration period, awaiting further breakthroughs in the market, with an indicator strength of 0.5.
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