The U.S. presidential election market is once again unfolding.
Written by: 1912212.eth, Foresight News
The significant market correction at the beginning of October left some investors filled with doubts, worried that this October, which historically maintains an upward trend, might be "different." As a result, history seems to always prove "this time is no different."
After BTC surged to a peak of $66,000 at the end of September, it did not stop there but instead experienced a thrilling pullback, plunging to a low of $59,000. However, it is precisely this volatility that has given rise to an even more powerful rebound storm! Since October 11, the market situation has changed dramatically, with a sharp daily increase of 3.67%, signaling the return of the upward trend, as the price surged back to the $63,000 high, and then galloped to $66,500.
Meanwhile, Ethereum also broke free from its shackles, rising from $2,300 to $2,650, with a daily increase of over 6.52%, marking the largest single-day increase since August.
In the market ignited by passion and hope, various sectors such as public chains SUI, SEI, APT, stablecoins ENA, AI sectors ARKM, WLD, and memes have all seen significant surges.
In terms of contract data, short positions suffered heavy losses. In the past 24 hours, the total liquidation across the network reached $246 million, with $210 million in short liquidations. The open contract data for BTC also soared above $37 billion.
Are the altcoins in the market dancing wildly, signaling the true start of the latter half of the bull market?
BTC Spot ETF Sees Large Net Inflow in a Single Day
Since the beginning of October, although some funds have seen net outflows, they have generally balanced with net inflows. Starting from October 8, there were three consecutive days of net outflows, totaling nearly $18 million.
On October 11, the data saw a significant reversal, with Bitcoin spot ETF net inflows reaching $253.54 million in a single day, setting a new single-day net inflow record for October. Following the large inflow of off-exchange funds, BTC's price also saw a significant climb on the same day.
The confidence of off-exchange funds remains relatively strong.
The Federal Reserve Will Continue to Cut Interest Rates, Market Expectations Stabilize
This week, the U.S. released the CPI and PPI inflation data for September. Both the overall CPI and core CPI year-on-year and month-on-month increases exceeded expectations; however, the year-on-year CPI increase of 2.4% still marked the lowest since February 2021. The PPI remained flat compared to last month, indicating further cooling of inflation.
Goldman Sachs economists analyzed that although the CPI and PPI inflation data for September were mixed, the final readings were still close to expectations, indicating that U.S. inflation is moving towards the Federal Reserve's 2% target, and the Fed is nearing its inflation goal.
After the release of these two major inflation data points this week, traders are almost certain that the Federal Reserve will cut rates by a quarter of a percentage point in its meetings in November and December.
U.S. Presidential Election
Historically, the cryptocurrency market often experiences upward trends around the time of U.S. presidential election results. On November 5, the results of the U.S. presidential election will soon be revealed, with only 20 days remaining.
Additionally, Bloomberg reported that even Kamala Harris, a presidential candidate who has not had much close connection with the cryptocurrency market, is working hard for votes.
On Monday, Harris proposed a new plan to provide loans to Black entrepreneurs and others facing barriers to financing. According to Harris's campaign outline aimed at Black male voters, the plan will offer 1 million loans, with a maximum forgiveness of $20,000. Harris also promised to support a regulatory framework for cryptocurrencies, providing more investment certainty for 20% of Black Americans who own or have owned digital assets.
The Trump family's DeFi lending project, World Liberty Financial, has also been active recently, bringing in several experienced executives and planning to publicly issue WLFI tokens.
Data from Polymarket shows that, so far, Trump's chances of winning are significantly ahead of Harris.
The market currently leans towards the belief that Trump's election as president will be beneficial for the cryptocurrency market; however, given that all U.S. presidential candidates have released friendly statements and views towards cryptocurrencies, the negative impact is minimal regardless of who takes office.
During the bull market from 2016 to mid-2020, Trump, a Republican, was in power, while from 2020 to 2024, Biden, a Democrat, will be in power. The cryptocurrency market, led by BTC, has experienced strong bull markets during their respective terms.
From the historical performance of the market in the past two cycles, the ascent of the cryptocurrency market has not been affected by whether a Republican or Democratic presidential candidate takes office.
After the official election results are announced, some funds that have chosen to wait and see may change their hesitant style and choose to boldly bet on the cryptocurrency market.
Future Market Trends
Coinbase Analysts: Macroeconomic Factors Affecting Cryptocurrency Performance Are Shifting from Monetary Policy to U.S. Election Results
Coinbase analysts David Duong and David Han stated that despite Bitcoin's lackluster price movement this week, "market sentiment remains largely unchanged, as evidenced by the stable perpetual contract funding rates and open contract numbers over the past week." They pointed out that the macroeconomic factors affecting cryptocurrency performance are shifting from monetary policy to U.S. election results, even though recent increases in CPI and core PPI have kept market expectations for rate cuts relatively stable.
They also mentioned that China's fiscal policy briefing this Saturday could indirectly impact the cryptocurrency market, especially during periods when many markets will be closed. The cryptocurrency market may be used to express proxy views on the scale and intensity of any fiscal policy announcements.
Bitfinex: The Actual Price of Short-Term Holders Becomes a Key Resistance Level for BTC
Bitfinex Alpha's latest analysis report emphasizes that the actual price of short-term holders (around $63,000) has become a key resistance level. A breakthrough at this level could trigger further increases, while failure could lead to a retest of support levels at $59,000 or even $55,000.
Bitfinex Alpha believes that the market remains in a passive state, and future trends will depend on whether Bitcoin can break through the actual price of short-term holders. They advise traders to be cautious of potential pullbacks while preparing for a possible strong rebound.
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