Written by: Shang2046
The information, opinions and judgments on markets, projects, currencies, etc. mentioned in this report are for reference only and do not constitute any investment advice.
BTC is expected to end its longest high-level shock period in history. Patience is the best strategy to welcome the second half of the bull market.
Market Week
This week, BTC opened at $62,811. As of the morning of October 14, it hovered around $62,500, recording a weekly cross with an up-and-down amplitude of nearly 9%. On Monday afternoon, BTC quickly rose to around $64,500, and then broke through the $66,000 mark in the evening.
If we ignore the rapid market on Monday, BTC has generally continued its relatively weak market since October in the past week. This is consistent with the net outflow of funds in the crypto asset world in October. During the same period, the monetary policies of the two superpowers, China and the United States, have undergone tremendous changes, which have also impacted BTC to a certain extent. On September 23, China issued perhaps the most intensive rescue policy for the stock market and real estate industry in history. The market tends to believe that this is related to the first 50-point interest rate cut in the United States the previous week. In the two weeks after Chinas rescue policy, the United States successively released strong employment data and relatively neutral inflation data. The two combined, the market quickly changed the Feds expectation of a 50-point interest rate cut to 25 points, and some institutions even believed that the possibility of no interest rate cut was not ruled out. This casts a shadow on Bitcoin, which is negatively correlated with the US dollar. BTCs recent bull market is highly correlated with US stocks, especially Nasdaq. In addition, spot ETFs are directly related to the two, and the recent market trend is also highly correlated with the inflow and outflow of ETF funds. A recent article by BlackRock pointed out that the market tends to compare BTC with US technology companies, but this clearly misunderstands the special asset attributes of BTC. In the medium and long term, the situation of being engulfed by US stocks will definitely be solved. Looking back at the world of crypto assets, after 7 months of high-level shock adjustments, BTC has established solid support in the current range, and the chips have also been fully washed. Once the second half starts, it will develop rapidly.
Federal Reserve and economic data
On October 10, the U.S. announced that the annual CPI rate was 2.4%, slightly higher than the expected 2.3%. On October 14, the U.S. announced that the number of new jobs in September was 254,000, higher than the expected 147,000. And the employment data for July and August were significantly revised upward. The continued expansion of the conflict in the Middle East has also increased the risk of inflation rebound. As the Fed officials continue to be hawkish, the market parties eventually lowered the interest rate cut this year. Currently, the FedWatch probability is the highest of two interest rate cuts, 25 basis points each time. With the decline in the interest rate cuts within the year, the U.S. dollar index rebounded strongly and rose to 102.89. At present, all parties in the market are gradually pushing the stock index to rise slowly under the expectation of a soft landing. The Nasdaq is approaching its previous high, and the Dow Jones and SP 500 have both hit record highs. After the adjustment, gold stabilized and rebounded. London gold rose 0.17% this week. Treasury bonds were sold 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, funds were generally outflowing, with a loss of $330 million, mainly due to the withdrawal of funds from the USDC channel. Specifically, USDT inflowed 65 million and USDC outflowed 750 million, resulting in a large outflow of 687 million from the stablecoin channel. The ETF channel contributed to positive capital inflows: two trading days out of five trading days recorded large inflows, with a net inflow of 357 million for the whole week. The large outflow of funds on the market was the main reason why BTC broke $60,000 again this week, but the purchase of funds from the ETF channel, supported by the rise of the Nasdaq, enabled BTC to recover to the $63,000 level after falling below $60,000. The rapid breakthrough on Monday was also directly related to the inflow of $470 million from the ETF on the 14th.
Supply Analysis
After the brief short to long last week, the long to short reappeared this week. Our previous analysis pointed out that the second dispersion of chips after the long-term accumulation of chips is one of the main signs of the start of the second half of the bull market. The cost line of short-term investors is currently around $62,500, and the maximum chip accumulation price is $61,800. The number of BTC accumulated on exchanges remains low, within 3 million.
BTC on-chain data
There are few changes in new addresses, an increase in transactions, an increase in active entities and transfer values, and the mid-term is entering an expansion period. Bitcoin mining computing power is running near a record high.
Ecological analysis
The Ethereum ecosystems active addresses and new address centers have entered a period of expansion, and Transactions have hit a record high, driven by Layer 2 Base.
Solanas new addresses and transactions remain high, the 30-average hit a new record high, and active addresses remain at a historical high.
Cycle Indicators
The EMC BTC Cycle Metrics indicator is 0.25, and the bullish signal needs to be further activated.
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