On the first trading day after the holiday, the popularity of the A-share market is obvious to all. In terms of turnover, the full-day turnover of A-shares on October 8 exceeded 3.45 trillion yuan, which is an amazing figure. According to statistics, the total annual turnover of A-shares in 2021 was 257.18 trillion yuan, and now the turnover in a single day has reached such a high level, which fully demonstrates the market's activity and the enthusiasm of funds. The incremental inflow of foreign capital into the market is also an important signal. Many foreign institutions have expressed their optimism about the Chinese stock market, and Chinese stocks have generally risen. According to statistics, the total cumulative turnover of northbound funds this year has reached 27.45 trillion yuan, which is 18 times the total turnover of 1.47 trillion yuan in 2015, and the ratio of northbound funds to the total turnover of the two cities has also increased significantly, and now exceeds 10%. The inflow of foreign capital has not only brought incremental funds to the A-share market, but also increased the proportion of institutional investors and promoted the spread of the concept of value investment. The policy strength is unprecedented. On September 24, the central bank and the regulatory authorities jointly issued a package of easing policies. Governor Pan Gongsheng's "500 billion after 500 billion" showed a strong intention to support the market. For example, the deposit reserve ratio and policy interest rate were lowered, and the market benchmark interest rate was driven down; the interest rate of existing mortgage loans was lowered, and the minimum down payment ratio of mortgage loans was unified; new monetary policy tools were created to support the stable development of the stock market. The introduction of these policies has stimulated investors' enthusiasm and provided solid support for the market rise. A record high in trading volume is usually an important signal of the coming of a bull market. The trading volume on October 8 was as high as 3.45 trillion yuan, which not only broke the historical record, but also showed that the market activity has increased significantly. The high trading volume shows that investors are optimistic about the market outlook, and funds are pouring into the stock market. At present, the overall valuation of A-shares is still low, and the valuation percentile of the ChiNext Index is less than 8%, which provides opportunities for medium- and long-term layout. In addition, brokerage firms worked overtime to attract customers, and the number of investors opening new accounts surged. Data showed that on September 27, the net value of investors' bank-securities transfers soared to 7.04, a three-and-a-half-year high. Brokerage firms temporarily opened services during the National Day holiday to meet investor needs. This series of phenomena indicates that the possibility of a bull market in the A-share market is increasing. However, the A-share market also faces some challenges, such as uncertainty in economic data and market volatility.But overall, with policy support, capital inflows and warming market sentiment, the A-share market is booming, with opportunities and challenges coexisting.

2. Crypto Market: Hope and Unknown Under the Undercurrent

1. Macroeconomic and policy changes

The Federal Reserve announced a sharp interest rate cut of 50 basis points. The incremental funds brought in by the loose monetary policy have driven the overall rise of the crypto market. Loose monetary policies are generally considered to be beneficial to speculative assets such as cryptocurrencies, and the market is optimistic about the future market. For example, according to the material "The Fed cuts interest rates by 50bps and the era of large-scale loose monetary policy is coming? What is the impact on the trend of cryptocurrencies?", after the Fed cut interest rates, the price of Bitcoin rose from US$59,000 to US$62,000. At the same time, as the US employment data picks up, the market generally expects that it will further stimulate the rise in Bitcoin prices.

(II) Incremental funds continue to enter the market

1. ETF

Net inflows into Bitcoin spot ETFs have a significant impact on price. Sustained net inflows indicate increasing demand for Bitcoin, and this positive sentiment tends to be reflected in the price, causing it to remain stable or rise. For example, the Financial Associated Press reported that Bitcoin ETFs have reported net inflows of funds for 18 consecutive days. The surge in demand may help Bitcoin prices break through the peak again, and the total net asset value of U.S. Bitcoin ETFs has reached $62.3 billion. On the contrary, if there are large net outflows, it may put downward pressure on the price of Bitcoin. Outflows of capital often indicate a lack of investor confidence, which can lead to price falls.

2. Stablecoins

The market value of stablecoins reflects the inflow of incremental funds to a certain extent. In the crypto market, when users buy stablecoins with fiat currency, these funds will flow into the market, driving up the market value of stablecoins. At present, the total market value of stablecoins is constantly breaking previous highs, with the latest data on October 8 being $171.3 billion. Among them, Tether (USDT) ranks first with a market value of nearly $119.6 billion, accounting for nearly 70% of the total market value of stablecoins. USD Coin (USDC) follows closely behind and is also growing steadily, with a market value of approximately $35.3 billion. As market confidence recovers, the continued demand for these two stablecoins will also increase.

(III) Merrill Lynch Clock Cycle

The Merrill Lynch clock divides the economic cycle into four stages: recession, recovery, overheating, and stagflation. Cryptocurrency is a risky asset, and funds usually flow into the crypto market during the recovery and overheating periods of the Merrill Lynch clock. In the recovery period, the economy begins to pick up, growth accelerates, inflation remains at a low level, market confidence gradually recovers, and capital inflows increase. Cryptocurrency is favored as a high-risk asset, and prices tend to rise. Although economic growth is strong during the overheating period, inflation rises, and investors' demand for cryptocurrencies such as Bitcoin increases, which may lead to rapid price increases. On September 18, the Federal Reserve announced a sharp interest rate cut of 0.5%, and the United States entered a rate cut cycle. Judging from the Merrill Lynch clock, we are currently in the transition period from recession to recovery, and a bull market may be just around the corner.

(IV) On-chain data indicators

The Bitcoin Rainbow Price Chart is a long-term valuation tool for Bitcoin that uses a logarithmic growth curve to predict the potential future price direction of Bitcoin. The warmer colors above show when the market may be overheated, which is a better selling point; the cooler colors indicate that the overall market sentiment is usually depressed, which is a better buying point. Taking today, October 8, as an example, BTC is in the green ribbon "buy" range, and the market is generally hot. If one day the BTC price is in the yellow, orange, and red ribbons of the rainbow chart, it means that the market is gradually heating up and the bull market signal is becoming more and more obvious.

Conclusion

The A-share market has shown great vitality and appeal over the past period of time. The massive influx of funds, strong policy support and high market sentiment have brought many opportunities to investors. However, market volatility and uncertainty always exist. While enjoying the benefits brought by the bull market, investors also need to remain vigilant and reasonably control risks.

Although the crypto market is relatively sluggish at present, cryptocurrencies such as Bitcoin still have great potential in the long run. On the one hand, the recovery of the global economy will bring more funds and investors to the crypto market. As the economies of various countries gradually get out of trouble, investors' demand for diversified investments will continue to increase, and cryptocurrencies, as an emerging asset class, are expected to attract more capital inflows.

On the other hand, policy support will also provide strong guarantees for the development of the crypto market. In recent years, more and more countries have begun to pay attention to and study cryptocurrencies, and some countries have even begun to formulate relevant policies and regulations to regulate the development of the cryptocurrency market. For example, some countries have begun to explore the issuance of central bank digital currencies, which will bring more legitimacy and stability to the cryptocurrency market.

In addition, the continuous advancement of technology will also bring new opportunities for the development of the crypto market. As the underlying technology of cryptocurrency, the application scenarios of blockchain technology are constantly expanding. With the widespread application of blockchain technology in finance, logistics, supply chain and other fields, the value of cryptocurrency will also be further enhanced.

In short, although the current crypto market is slightly sluggish, by observing a series of positive signals, we have reason to believe that with the global economic recovery and policy support, the crypto bull market is just around the corner. While paying attention to market dynamics, investors also need to remain rational and calm and allocate assets reasonably to achieve long-term investment goals.

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