Market Analysis – BTC Challenges Historical Highs, U.S. Elections Will Trigger Volatile Movements
BTC successfully broke the $70,000 barrier yesterday, reaching a peak of $73,620, just a step away from the historical high of $73,777 set in March this year.
Looking back over the past six months, BTC has touched the $70,000 range five times but has not successfully broken through, even forming a prolonged red downtrend line above for six months, accumulating significant selling pressure. After half a year of consolidation, with positive news from September and an increasing momentum for Trump in the upcoming U.S. elections, BTC has broken through multiple resistance levels directly challenging new highs. The price trend has shown a nearly 90-degree upward trajectory, making it very likely that BTC will successfully break historical highs soon, attracting funds from both within and outside the circle, potentially leading to a full bull market.
Besides BTC, DOGE has also performed remarkably well in the past week. DOGE is also the largest market-cap meme coin, thus having considerable recognition both within and outside the circle. The recent surge is largely related to the increasing momentum of Trump and Musk. Investors have already linked DOGE with Musk, who strongly supports Trump. This week he even began analyzing politics, so if Trump wins, it’s conceivable that DOGE will have a wave of celebratory trading.
At the same time, SOL also broke through $180 yesterday, and related ecosystem tokens RAY and JUP showed good gains. Compared to ETH, SOL appears very strong; over the past six months, BTC has been the strongest and most resilient coin. The SOL/BTC trend has almost leveled off over the past six months, indicating SOL is similarly strong compared to BTC, while ETH/BTC keeps setting new lows. After yesterday's big rise in BTC, that exchange rate has reached 0.036 BTC to 1 BTC, returning to 2021 levels. Since the beginning of the year, Bitcoin has risen about 60%, while ETH has only risen about 10%.
In summary, the current market sentiment is bullish, with holding BTC becoming a consensus, and breaking historical highs is merely a matter of time. In the report on 10/16, it was suggested to hold over 40% of BTC. Currently, the BTC strategy is also fully invested, and the fluctuations between coins in this bull market are highly polarized. Even though BTC is about to set historical highs in the past few days, most altcoins are still at relatively low levels, and established public chains are also struggling. Choosing coins will be very important in this bull market, and we will adjust the coins in our follow-up investments to adapt to the potential bull market ahead. However, risk management remains paramount; the election is next week, and with close polls, the outcome is hard to predict, so conservative investors may consider reducing their positions and wait to invest until after the election concludes.
Polls and Predictions
In the coming week, the most impactful issue on the market is undoubtedly the U.S. elections. Current polling results show that Trump and Kamala Harris are still very close in support, with the polling gap in seven key swing states not exceeding 2 percentage points, making it difficult to determine who will ultimately win. However, there are significant differences in predictive markets; current traders' betting results show Trump has a 67.3% chance of winning, while Harris has dropped to 33.6%.
Election Year Historical Statistics: How Elections Affect the Market?
Analysis firm T. Rowe Price created a statistical report based on historical data from 1927 to find out if elections affect the performance of the U.S. stock market. The results showed that prior to elections, the average return of the S&P 500 generally exceeds that of non-election years, but after the election day, the stock market's returns over 1 month, 6 months, and 12 months are significantly lower than the corresponding performance in non-election years.
High Probability of Economic Recession in Election Year
High Probability of Economic Recession. In the past 24 presidential elections, over half (54%) saw the U.S. economy enter a recession in the year following the election (according to the National Bureau of Economic Research NBER definition). This ratio is significantly higher than the average occurrence of economic recessions in other years during a presidential term: specifically, there is a 29% chance of a recession occurring in the second year of a presidential term, 17% in the third year, and 25% in an election year.
In other words, the likelihood of the U.S. economy entering a recession is relatively high in the 12 months following the end of a presidential election year. This may be because the market has already anticipated that the economy will weaken after the end of the election year, so the stock market may reflect this expectation at the end of the election year.
Impact of Reelection on Volatility
On the other hand, statistics also indicate that when the incumbent party fails to retain the White House, the volatility of the S&P 500 is generally higher in the months before and after the election (see Figure 5), which may reflect the uncertainty brought by policy changes. In this case, the volatility is highest in the month before voting. There are also two trends worth noting:
When the incumbent party is re-elected, volatility tends to decrease before the election and slightly increase afterward.
When the incumbent party loses, volatility significantly increases before voting and then recedes.
How the Cryptocurrency Market Will Change
The market holds differing views on the direction after the election.
At this stage, there is significant divergence in the market regarding the performance of the cryptocurrency market after the elections. The market generally believes that if Trump wins, there may be expectations for a more lenient regulatory environment, which would be good news for the cryptocurrency market. Compared to the Democrats' stringent enforcement actions in recent years, the Republican government has historically had a more lenient regulatory attitude towards cryptocurrencies, which may foster innovation and investor confidence.
Recently, Bitcoin's rebound is likely betting on Trump winning. Tyr Capital CIO Edouard Hindi stated in an interview with the media (The Block) that regardless of the election outcome, traders taking profits may depress Bitcoin prices.
Geoff Kendrick, Global Digital Asset Research Director at Standard Chartered Bank, believes that the performance of the cryptocurrency market will depend on the election results. If the Republican Party sweeps Congress (meaning the Republicans win both the House and Senate), the year-end target price for Bitcoin could rise to $125,000. Conversely, if current U.S. Vice President Kamala Harris wins, Bitcoin may decline.
Bitfinex stated in a report released on Monday that the uncertainty of the U.S. elections, the 'Trump trade' narrative, and seasonal factors in Q4 have created a 'perfect storm' for Bitcoin. Analysts believe that given the steady growth of Bitcoin call options and favorable seasonal factors in Q4, Bitcoin may break through the historical high of $73,666 after the U.S. elections.
On the other hand, according to an analysis study by an Italian bank on the return to power in 2024, if Trump wins in 2024, it is likely to be accompanied by fluctuations in the bond market, rising stock prices, reduced volatility, and falling oil prices.
Besides the presidential election, control of the House and Senate is also being closely monitored. Current polls suggest the Republicans are likely to win the Senate, while the Democrats are expected to win the House, which could trigger a political stalemate making policy implementation more difficult. Interestingly, an analysis by asset management firm Darrow Wealth Management found that a political deadlock with the presidency, Senate, and House controlled by different parties is the best outcome for the market, as it prefers an environment with fewer policy changes.
Overall, it is currently difficult to determine where the election results will push the cryptocurrency market in the short term. However, it is certain that next week, under the dual events of the U.S. presidential election and the Federal Reserve's interest rate decision, the cryptocurrency market will certainly welcome significant volatility, and investors should appropriately reduce positions to avoid excessive risks.
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'GTRadar – BULL', 'GTRadar – Balanced', and 'GTRadar – Potential Public Chain OKX' have recent 7-day returns of +4.02%, -3.07%, and -0.85% respectively, and 30-day returns of +4.36%, -6.74%, and -1.32%.
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Followers who frequently change their investment portfolios tend to have lower long-term returns compared to those who consistently follow one set of investments. One should not easily end following due to short-term pullbacks; rather, a pullback can be a good time to start following, as jumping in and out can significantly reduce returns.
Focus News
Tesla's Q3 Financial Report: Net Income Increased, Unsold Bitcoin
According to Tesla's Q3 financial report released on October 23, the company did not sell digital asset investments worth $184 million in this quarter and has not sold any held cryptocurrencies for five consecutive financial quarters.
The number of Bitcoin whales has risen to its highest level since January 2021.
According to data tracked by blockchain data analytics firm Glassnode and Bitwise's European research director André Dragosch, the number of Bitcoin whales (wallet addresses holding at least 1,000 BTC) surged to 1,678 at the beginning of this week, reaching its highest level since January 2021.
U.S. Government Wallet Address Hacked: $20 Million in Crypto Assets
On the 24th, significant movements were observed in the U.S. government's wallet, with approximately $20 million worth of cryptocurrencies transferred to external addresses, related to the Bitfinex hacking incident, coming from nine different U.S. government seizure addresses. These tokens include nearly $14 million in AUSDC stablecoins, $5.4 million in USDC, $1.1 million in USDT, and nearly $500,000 in ETH. However, the attackers later returned most of the funds for unknown reasons.
Microsoft considers investing in Bitcoin; board recommends against it.
According to documents submitted to the U.S. Securities and Exchange Commission (SEC) on Thursday, tech giant Microsoft appears to be considering investing in Bitcoin. The company has included this topic as a 'voting item' in the agenda for the next shareholder meeting scheduled for December 10, titled 'Assessment of Investment in Bitcoin.'
Kraken Launches Layer 2 Network Ink Based on Optimism Superchain
Cryptocurrency exchange Kraken announced on the 24th that it will launch a Layer 2 network Ink built on Optimism's Superchain. This blockchain will focus on creating the best decentralized finance (DeFi) experience, providing users with seamless access and interoperability.
Financial Supervisory Commission confirms (VASP registration regulations) will be implemented a month earlier.
Yesterday, Financial Supervisory Commission Chairman Peng Jinlong confirmed during a financial committee inquiry that the implementation date of the VASP registration regulations will be advanced from the originally scheduled January 2025 to December 2024. Legislator Ge Rujun questioned whether the administrative department was changing the regulation implementation schedule under pressure from the Executive Yuan, which would put enormous pressure on operators, and such a rushed implementation could lead to flaws in the registration application process.
FTX and Bybit Exchange Reach $228 Million Settlement Agreement, Claim Date Approaches?
FTX bankruptcy estate administrators reached a $228 million settlement agreement with Bybit exchange. According to legal documents dated October 24, this settlement stems from a lawsuit filed by FTX estate administrators in 2023, aimed at recovering funds to repay past customers and creditors.
Tether CEO refutes (Wall Street Journal) allegations, announcing USDT reserve assets.
Tether CEO Paolo Ardoino recently publicly introduced the reserve asset portfolio supporting the company's Tether-USD stablecoin (USDT) and responded to (Wall Street Journal) reports about Tether being investigated by the U.S. Department of Justice and Treasury. Ardoino strongly denied these allegations and accused the report of being 'just old news revisited.'
Vitalik proposed methods to reduce Ethereum protocol bloat in the 'Purge' upgrade roadmap.
Ethereum co-founder Vitalik Buterin outlined a potential 'Purge' upgrade roadmap in his latest article, aimed at gradually addressing the complexity and 'bloat' issues of Layer 1.
Coinbase Analyzes Solana Network Fees: Activity Tends Toward U.S. West Coast Hours, DEX Fees Higher Than Ethereum
According to the latest research report released by Coinbase Institutional, the activity on the Solana (SOL) network typically peaks during U.S. hours, but compared to Bitcoin and Ethereum, Solana's activity seems more biased towards the U.S. West Coast time zone. The report noted that Solana's fee expenditures are consistent with other low-fee networks, with the top 0.13% of users contributing 90% of non-voting transaction fees, most of which come from DEX trading activities.
Ethena accused of 'black box': Using locked tokens to mine stealthily, ignoring doubts.
Recently, netizen Nomad disclosed on social media that the decentralized finance protocol Ethena's team was accused of using 180 million ENA tokens, equivalent to 25% of the SENA supply, during the SENA third-quarter points airdrop event, diluting the yields of other participants. This raised serious concerns among holders regarding the team's ethics and transparency. However, the Ethena team later denied the allegations of using locked tokens for mining.
Accused of supplying TSMC chips to Huawei, Bitmain: Incident has no relation to the company.
According to Reuters, on the 26th, two informed sources reported that TSMC suspended shipments to Chinese chip developer Sophgo after discovering that Huawei's AI processors were using chips produced by them. It is reported that Sophgo is affiliated with major mining machine manufacturer Bitmain. However, Bitmain stated in a statement today that it focuses on the cryptocurrency mining machine business and has no connection to the aforementioned supply investigation.
Binance announces the launch of 'Binance Wealth' for high-net-worth clients, attracting traditional financial institutions.
According to an official announcement, Binance exchange announced the launch of a solution specifically designed for high-net-worth clients called 'Binance Wealth', which allows clients to flexibly manage investments or allow wealth managers to recommend investment targets. Wealth managers will reportedly be responsible for the client's onboarding process and provide a user experience with traditional wealth management frameworks.
Bitcoin price approaches historical highs; BlackRock's IBIT fund trading volume hits a six-month high.
Bitcoin (BTC) surged past the $73,000 mark on Wednesday morning Taiwan time, peaking at $73,600, just about 0.3% away from the historical high set in March this year. Before publication, Bitcoin's price had retreated to $72,300. While Bitcoin approaches its historical high, U.S. Bitcoin spot ETFs have so far attracted about $3.6 billion in net inflows this month.
The above content does not constitute any financial investment advice. All data comes from GT Radar official announcements, and each user may experience slight differences due to varying entry and exit prices. Past performance does not guarantee future results!
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