Using funding data to predict investors’ expectations for the copycat season
In fact, this is also a common question among many friends. The previous general rise of altcoins lasted for eight days from November 6 to November 13. It was mainly because Trump’s victory brought about FOMO emotions among investors in the cryptocurrency field, which was also the reason why#BTCrushed all the way to $93,000.
But has liquidity actually improved? It has improved, but only to a limited extent, because the US monetary policy has not really adjusted. It is true that more investors have increased their risk appetite and investment due to the interest rate cut, but this is completely different from when interest rates were low. To put it simply, the sentiment is there, but the funds are not.
The eight consecutive days of rise are not only due to the influx of off-market funds, but also the activeness of on-market funds. These two points can be seen from the market value of USDC and USDT. The market value of USDT has risen from 120 billion US dollars on November 6 to 126.6 billion US dollars today, while the market value of USDC has risen from 34.7 billion on November 1 to 37.1 billion on November 9, and then began to decline gradually.
This means that American investors have gradually reduced their FOMO since last Saturday, while investors in Europe and Asia may still be in a FOMO mood. Of course, there are differences here. American investors pay more attention to#BTCand a small amount of #ETH, as well as some ALT (copycat), while European and American users pay more attention to Meme and are more interested in the Meme ecosystem of #SOL.
This does not mean that the United States does not recognize Meme. After all, the size of Meme’s funds is still too small to shake the purchasing power of BTC. Therefore, there is no such thing as Meme sucking blood from BTC, but it can indeed be considered that Meme has attracted a large number of ALT expecting users.
Does that mean the altcoin season is over and funds have started to exit the market? I don’t think so. We need to observe the stock of funds in the exchanges. First of all, for USDT, we already know that the market value increased by US$6.6 billion from November 6 to November 14. From the exchange data, we can know that USDT increased from US$22.5 billion on November 5 to US$29.2 billion on November 14, an increase of US$6.7 billion. In other words, the newly added market value is concentrated in the exchanges, but there is no obvious sign of an end.
Looking at USDC, it also increased by US$2.4 billion from November 1 to November 9, while the exchange inventory increased from US$1.8 billion on October 31 to US$2.9 billion on November 9, an increase of US$1.1 billion. This is completely different from USDT. We can still see a large number of USDC entering the market for trading. So in fact, although American investors do not have the most funds, their exit rate is the highest.
Therefore, I think that the current investors are not just a few who are waiting for the outbreak of the alt season, but more investors are waiting for the outbreak of the alt season, especially the Asian and European funds that missed the rise of #Bitcoin. They have special expectations for the outbreak of ALT. What they lack is sustained good news.
The funds are actually already starving. Do you remember where you were the last time this happened?
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