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After returning to the upward trend line last week, BTC continued to surge this week, recording a 15.76% weekly increase. Driven by the "Trump trade" sentiment, BTC has accumulated an increase of over 30%, facing significant selling pressure in the short term, but with the support and push of strong buying power, it has recorded another substantial increase.
This week, BTC opened at $80,427.69 and closed at $89,886.69, with effective volume expansion, achieving four consecutive weeks of increases. In October, after breaking above the 200-day moving average, BTC surged again this week, completely breaking free from the "new high consolidation area" pressure and charging above the bull-bear dividing line (the blue line in the chart, around $75,000), with no technical indicator resistance ahead.
The October CPI data released by the US and the "hawkish" remarks by Fed Chair Powell this week have changed the market's expectations for a rate cut in December, dragging down the three major US stock indexes with consecutive declines. However, the performance of BTC is significantly stronger than the Nasdaq, not only achieving a substantial weekly increase, but also showing a trend of independent market movement.
The Fed and Economic Data
Data from the US Bureau of Labor Statistics on Wednesday showed that the October CPI rose 2.6% year-on-year, the first time it has accelerated year-on-year since March. This year-on-year figure was in line with market expectations, but Powell's subsequent remarks reduced the "dovish" guidance, stating that the US economy is performing quite well and is in no "hurry" to lower interest rates. This caused the US stocks, which had already priced in a 25-basis-point rate cut in December, to fall into a weak trend, with the three major indexes falling 3.15%, 1.24% and 2.98% respectively during the week. The upward trend in gold also came to an abrupt halt, with London gold falling 4.58% for the week.
The US dollar index rose another 1.63% this week, reaching a staggering 106.6842 as of Saturday. US Treasuries at both the short and long ends remained at high levels. The trend of global capital inflows into the US market has not changed.
Is the "Trump trade" over? It is still too early to judge. We believe that the rate cut expectations have been lowered, and the impact is relatively short-term, and the market may quickly complete the repricing of this expectation adjustment. The US economic soft landing and the trend of core corporate profit growth have not changed in the medium and long term.
Stablecoins and BTC Spot ETF
The capital inflow into the crypto asset market this week was relatively optimistic.
Affected by the US stock market, the BTC Spot ETF channel recorded outflows on two out of the 5 trading days, but still had a net inflow of over $1.6 billion for the whole week, slightly higher than the previous week.
The stablecoin channel, on the other hand, continued to exceed the BTC Spot ETF channel in terms of inflow scale after last week, reaching $4.46 billion, indicating a very urgent capital inflow from non-US regions.
The large-scale capital inflow has become a strong support for BTC to continue climbing after returning to the upward trend line last week. Although the short-term increase has been huge, if the capital inflow continues, a significant correction is unlikely to occur.
Selling
The "Trump trade" has driven BTC's increase to nearly 30%, and the sharp short-term increase has led to large-scale selling by investors. According to on-chain data monitoring by eMerge Engine, long-term investors have "reduced" 180,000 BTC, harvesting over $1 billion in profits.
However, on-chain monitoring shows that the exchange's BTC balance has decreased by more than 20,000 BTC this week, indicating that the selling scale is still less than the scale of new investors buying in.
On-chain data shows that as of the 16th, the average unrealized profit of short-term investors is still maintained at a high level of 26%, indicating that there is still significant selling pressure in the follow-up market. If the capital inflow slows down, the short-term price may decline.
In the medium and long term, we maintain a cautiously optimistic attitude, with the biggest uncertainty coming from the rate cut in December and whether the US stock market will undergo a major adjustment.
Cycle Indicators
The EMC BTC Cycle Metrics indicator is 0.875, with the market in an upward phase and in a vigorous upward state.
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