Crypto markets have been moving higher recently as investors’ expectations for a rate cut at the November FOMC meeting have risen and risk appetite has turned on. The Chicago Mercantile Exchange (CME) FedWatch tool shows that the probability of a 25 basis point rate cut on November 7 is currently 94%, up from 80% last week.

After Bitcoin failed to challenge the "68,000 US dollar barrier" twice last night, the current rally has paused, but it is still hovering above 67,000 US dollars, maintaining a strong bull market. At the time of writing, the price of Bitcoin is about 67,300 US dollars, with a 24-hour increase of 0.37%.

Warning Signs of a Potential Correction

The current market may see a short-term correction as retail investors begin to develop FOMO.

As shown by the Fear and Greed Index, current market sentiment is sending key signals that cannot be ignored.

First, the swings between fear and greed are becoming more frequent and shorter in intervals. This narrowing suggests that uncertainty remains high and markets are highly sensitive to even the smallest triggers.

It is worth noting that when retail participation in long positions reaches such low levels, the likelihood of a reversal increases. Historically, when the indicator reverses from low to high, it indicates that retail traders are entering long positions en masse - typically a bearish sign. Retail investors tend to be on the wrong side of the market, and their switch from short to long often marks a local top. When they enter long positions en masse, the market tends to reverse and fall.

Current favorable factors

One is the news of the delay of the compensation payment from Mentougou, which may mean that the sell-off caused by the compensation will be postponed. Previously, the news of Mentougou caused Bitcoin to plummet several times, and the market is more sensitive to such news.

The second is that Harris has made it clear that she supports cryptocurrency. Her approval rating is currently far behind Trump, and she may be trying to use this as a last-ditch effort to win votes. After all, there is not much time left for the election, and she may have more "big moves" in this regard in the future, which is worth paying attention to.

The third is to start taxing the overseas investments of the super-rich, with the tax rate possibly as high as 20%, which in turn increases the demand for cryptocurrencies, especially Bitcoin, among the rich.

Fourth, Musk donated $75 million to support Trump. According to Federal Election Commission documents, Musk donated $75 million to a U.S. political action committee supporting Trump.

Fifth, Bitcoin is seen as a safe-haven asset. Recently, South Korea is the main factor. Most people choose Bitcoin as a hedge against geopolitical conflicts.

The second half of the bull market is coming!

Recently, the Nasdaq has been consolidating at a high level, so Bitcoin is also fluctuating up and down. However, if you look at the trend of the Nasdaq, the bottom of this K-line is rising, and there is a strong probability that it will break upward. Bitcoin, which is positively correlated with its trend, will also rise accordingly, starting a new market

Moreover, starting from October, both the cryptocurrency market and the U.S. stock market have strong expectations for rising prices, which Wall Street calls the Halloween effect. You can look at the previous trends of the cryptocurrency market or the U.S. stock market at will. Autumn and winter have always been traditionally rising months. Coupled with the upcoming Nasdaq breakthrough, the U.S. election and the second interest rate cut by the Federal Reserve, we are definitely looking forward to the next trend of the cryptocurrency market.

To sum up: the darkest time has passed, and you thought the food on the table was half eaten. In fact, the food has not yet been served. Wait, the fun is about to begin.

The current market trend is more like clearing out the profit-taking of previous altcoins.

Strong currencies such as WIF, SUI, TAO, etc. have completed a wave of pull-ups, indicators have diverged, and a correction is needed in terms of form.