Written by: 0xWeilan
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.
Market Summary
This week is the most important week of 2024. Both volume and price are rising. BTC has returned to the upward trend line after 8 months of adjustment, starting the second half of the bull market.
This week, BTC opened at 68736.40 and closed at 80428.92 USD, up 17.01% for the whole week, and the volume was effectively enlarged. In October, BTC conquered the city and took over the 200-day moving average. This week, it rose again, completely getting rid of the suppression of the new high consolidation zone and rushing to the bull-bear dividing line (the blue line in the above figure, about 75,000 USD).
Accompanied by massive capital inflows, the breakthrough of these two technical suppressions marks the complete launch of the second half of the bull market.
The biggest driving force behind the markets rise this week came from the outcome of the US election.
Trump was elected as the 47th President of the United States. His tax cuts and deregulation are believed to effectively improve the profitability of American companies. Coupled with the increase in liquidity during the interest rate cut cycle, the US stock market is likely to continue to rise in the short and medium term.
Federal Reserve and economic data
After the US election was settled, the Federal Reserve, which was postponed for one day, announced that the interest rate would be cut by another 25 basis points. The Federal Reserve also stated that it would orderly promote interest rate cuts to a market-neutral level. According to market performance, the current trading parties have fully defined the pricing of a soft landing for the US economy. At the same time, because Trump won, his economic policies are expected to push up inflation to a certain extent, which makes it very difficult to reduce interest rates below 2%. In its speech, the Federal Reserve no longer mentioned the inflation target of 2%. In 2025, the market is likely to usher in higher inflation, and the room for interest rate cuts will be affected to a certain extent.
Previously, we mentioned in our research report that the current market is trading around a soft landing or a hard landing, but as the election approaches, the Trump deal has become the mainstream. After the election this week, US stocks have risen sharply after appropriate adjustments. The Nasdaq, Dow Jones and SP 500 recorded increases of 5.74%, 4.61% and 4.66% respectively. The US dollar index rose another 0.63% from its high to 104.9569%, London gold fell 1.85% this week, and US bond yields stopped rising.
We believe that with the Republican victory, a new consensus is forming and the market is very optimistic about the future development of the U.S. stock market. Traders are learning to bet on targets with strong performance growth in a low-tax, low-interest financial environment, facing the possibility of slightly higher inflation.
Stablecoins and ETFs
The strong performance of the U.S. stock market provides strong support for the inflow of funds into the BTC ETF.
This week, the crypto market saw a massive inflow of $6.504 billion, the largest inflow week in 2024. Among them, $1.728 billion flowed into the BTC ETF and $4.776 billion flowed into the stablecoin channel.
The massive inflow of funds from the stablecoin channel has allowed BTC to continue its fierce upward trend in the Altcoin market. ETH, which was severely affected by Fud, recorded a 29.52% increase in a single week. MEME Coin Doge, which has Musk’s concept, has soared by 83.49%.
Although BTC has recorded a huge increase, it has been adjusted for 8 months. The current short-term floating profit level is around 16%. Therefore, although the price has risen to a record high, the selling is still far lower than the first record high in March. Considering the fierce influx of funds in the market and the general optimism of the market for the future, the price of BTC may continue to rise regardless of the suppression of technical indicators.
Cycle Indicators
The EMC BTC Cycle Metrics indicator is 0.875, and the market is in an upward phase, showing a relatively vigorous upward state.
END
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