The market has been falling in the past few days, with BTC dropping to around $55,600. Altcoins are in even worse shape, with the decline catching up with last year's bear market level.

The key factors that are most likely to affect the crypto market in the future include: Fed rate cuts, elections, SEC regulatory strategies, FTX debt repayment schedule, US stock and technology stock trends, US Bitcoin ETF fund flows, halving cycles, etc. Especially in anticipation of rate cuts and halvings, many investors and institutions have adopted early deployment methods, and September may be the last drop in the current market.

Are you optimistic about the future? Or is it over?

Bitcoin’s illiquid supply reached 74% of the total, a record high, indicating that the supply shock caused by the halving is actually intensifying, which will provide increasing impetus for Bitcoin and other crypto assets in the coming months.

If the dollar weakens and interest rates continue to fall, it will be good for Bitcoin. The main downside risk to crypto valuations is a further rise in unemployment and a possible recession, but U.S. policymakers will start to release money and promote consumption when there are signs of a recession.

Data shows that Bitcoin has only experienced declines in October in 2014 and 2018, both of which were in bear market cycles. Currently, the market is in the year of Bitcoin halving cycle. Historically, Bitcoin has only seen single-digit gains in October in 2018 (also a bear market year). Apart from this, October usually brings double-digit gains, with an average increase of 22%.

A 25 basis point rate cut could signal the start of a typical easing cycle, while a more aggressive 50 basis point cut could cause an immediate surge in Bitcoin prices, but could be followed by a pullback as recession fears grow.

Bitcoin may have strong support at $54,000, and the options market still shows medium-term bullish signals. The impact of recent macroeconomic data on cryptocurrencies has weakened.

Bitcoin’s average hash rate has been growing steadily over the past year and is set to see significant growth in 2024. Historically, the hash rate has often moved in line with Bitcoin’s price action, reflecting miner confidence and more bullish market sentiment.

The on-chain indicator Bitcoin Puell Multiple Index shows that Bitcoin is close to a "favorable" buy level. In addition, the low price of Bitcoin computing power may suggest that the BTC price is close to the bottom.

Cryptocurrency has entered a correction trend, and whale users have begun to plan for long positions. The number of large call options has increased, with most expiration dates chosen at the end of September and the end of October.

End of the article

In terms of the comparison between the long and short positions, the bearish sentiment in the market is relatively high, and the bullish sentiment does not overwhelmingly cover the bearish view. The current market perception is more inclined to believe that there is still a risk of decline before the interest rate cut, and several other major factors such as the election, the US economy, and regulation are still unclear, and the market trend may fluctuate violently at any time. However, institutions are generally optimistic about the long-term upward trend of the crypto market, and giant whales are also quietly making arrangements. Perhaps this is a major driving force for the rise.

The market fluctuated repeatedly and is now barely holding at 56,000. BTC's ETF has experienced net outflows for seven consecutive days, with an outflow of 200 million US dollars yesterday.

The small non-farm ADP was released last night, showing an increase of less than 100,000 jobs, marking the fifth consecutive month of slowing growth, further confirming the cooling of the job market and benefiting the Fed's interest rate cut.

The September rate cut is now a foregone conclusion. The unemployment rate and non-farm payroll data to be released tonight at 20:30 are particularly critical.

Because the data will give the final word on the rate cut, be alert to the possibility of BTC hitting 55,000. If you can avoid opening a contract, try not to open one.

The future of the cryptocurrency world depends on the Federal Reserve's base interest rate. The current interest rate is between 5.25% and 5.5%, and it may drop below 3% by the end of 2025.

The lower the interest rate, the more beneficial it is to the cryptocurrency market, but in the past two years it is unlikely that there will be a situation like 2021 where there will be a large-scale release of money at zero interest rates and a big rise in the cryptocurrency market.

The money-making effect has decreased, and there are only local opportunities. The current recommendation is to hold on to the spot goods in your hands. It is obviously inappropriate to short sell or cut losses at this price.