Driven by stimulus policies to revive the sluggish economy, the A-share market has risen sharply. The Shanghai Stock Exchange opened with a daily limit after the holiday. However, this stimulus policy did not boost the cryptocurrency market as some people expected, but instead diverted investment from the market. #大A香还是大饼香

During the entire National Day holiday, the cryptocurrency world was a mess. The entire market had no trend at all. Many cryptocurrency friends withdrew from the A-share market one after another. Someone asked me where I would go, and I answered affirmatively that I would still stay in the cryptocurrency world, because the weekly line will inevitably change in the fourth quarter. Now we can only keep trying to break through, because once the trend changes, it will be a natural trend.

Cryptocurrency retail investors flock to the stock market

Recent reports suggest investors are moving funds from stablecoins like USDT into Chinese stocks, eager to cash in on the market rebound. This shift reduced inflows into the cryptocurrency market. Although it briefly stood at $66,000 on September 27, it subsequently fell sharply, reaching as low as $59,828 by October 3. The market has been difficult to recover. Although the market retreated from the support position of 62800 yesterday and then rose to 64400, this morning the market has returned to its original shape. At the time of writing, the price of BTC was around US$62,200, which was significantly lower than the stimulus policy. level at the time of announcement.

Will the Big A limit the development of the crypto market? Where will the market go? What are the key short-term catalysts?

There has been a lot of discussion recently about the A-share market limiting the growth of Bitcoin. I believe that although the surge in the A-share market may temporarily draw investment away from Bitcoin, as the A-share market stabilizes, funds will flow back into the cryptocurrency market, reigniting the bullish trend for Bitcoin and other digital assets, and the cryptocurrency market will regain momentum.

Although the cryptocurrency market is currently stagnant, I firmly believe that the bull market is still there. We just need to hold on to our chips and wait for clearer macroeconomic or structural catalysts to drive sustained growth and the main uptrend.

1. October tends to be a bullish month for cryptocurrencies

Historically, October has tended to be a strong bullish month for cryptocurrencies, often referred to as “Uptober,” with over 70% of Octobers bringing positive returns for Bitcoin.

While previous performance does not predict future performance, we believe the popularity of ‘Uptober’ may have influenced behavior and caused Bitcoin to perform well in October.

2. The Fed’s rate cut cycle has not yet affected the market value of cryptocurrencies

Despite the Federal Reserve’s recent rate cuts, the broader cryptocurrency market has yet to see the expected positive impact. A falling interest rate environment is generally supportive of risk assets, but the correlation between the total cryptocurrency market capitalization and the federal funds rate remains weak.

Since the U.S. cut interest rates, we have not seen a "rise" in cryptocurrency prices due to the rate cut. The market may be waiting for more lasting stability before making a decisive shift.

3. Bitcoin ETF options may enhance market liquidity

As mentioned in a tweet some time ago, spot Bitcoin ETF options trading has been approved. This will enhance liquidity and attract new participants to the market. And it may start a positive feedback loop, enhance market structure and make digital assets more accessible to institutional investors.

4. FTX’s $16.5 billion bankruptcy plan approved

The repayment plan proposed by the restructuring team of the bankrupt cryptocurrency exchange FTX was approved by the judge earlier. The vast majority of customers will be able to receive approximately 118% compensation for their losses, and the plan is expected to be launched as early as the end of 2024.

Small creditors with claims of less than $50,000 are expected to start receiving payments by the end of 2024, while creditors with larger claims may have to wait until the first or second quarter of 2025.

It is worth noting that if FTX does return approximately $14-16 billion to creditors in the fourth quarter of this year, it may bring a large amount of new capital to the cryptocurrency market, and the future market is worthy of our attention.

At present, we can continue to see the crypto ecosystem's sensitivity to macro factors gradually increase, so we wait for the next major development catalyst and enhanced retail participation to provide long-term growth for the ecosystem, and as the A-share market stabilizes and funds flow back, the crypto market will reignite the bullish trend and regain momentum.

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From the perspective of Bitcoin's halving cycle, this month is crucial. The market is about to reach a turning point and a surge is imminent. Historical data is always trustworthy and it does not lie. #BTC☀ #Btcoin