On Tuesday, U.S. stocks opened lower again, with the S&P 500 index down 0.2%, and Bitcoin following suit. The spot price of gold rose to $2744.07 per ounce, an increase of 0.8%, continuing to break historical highs. Nvidia's stock price rose to $144, with a market capitalization exceeding $3.5 trillion. Federal Reserve's Daly stated that there are no signs indicating that the Fed will stop cutting interest rates, with a reasonable estimate of the 'neutral' rate between 2.5% and 3.0% (current rate 4.75-5.0%).
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Federal Reserve's Schmied expressed his personal opinion that cryptocurrencies are a risk asset, a playground rather than a currency. Given the uncertainty about how low the Fed should ultimately lower rates, he tends to favor slowing the pace of rate cuts. In his first public speech since August, Schmied mentioned he hopes for a 'more normalized' policy cycle, where the Fed will 'moderately' adjust to maintain economic growth, price stability, and full employment, and slowing the rate cuts will also help the Fed find a so-called neutral level where monetary policy neither burdens nor stimulates the economy. The Indonesian Commodity Futures Trading Regulatory Authority (Bappebti) announced an extension for cryptocurrency trading platforms to obtain Physical Crypto Assets Trading (PFAK) licenses, mandating compliance with the latest regulatory standards by the last week of November 2024. The new regulations provide additional time for crypto trading platforms and expand participation in the crypto market. Komainu, a crypto custody company jointly established by Nomura Securities, Ledger, and Coinshares, plans to acquire its competitor Propine Holdings Pte Ltd. in Singapore and is awaiting approval from the Monetary Authority of Singapore. Ultrasoundmoney data shows that the net supply of ETH increased by 7663 ETH over the past 7 days, with the supply increasing by approximately 18332 ETH and 10668 ETH destroyed through a burn mechanism. Coinshares weekly data indicates that optimism surrounding the election drove digital asset inflows to $2.2 billion last week, the highest level since July, with inflows into the U.S. reaching $2.3 billion and small outflows in other regions, possibly due to profit-taking.
Analyst Avinash Shekhar stated that BTC is approaching the key resistance level of $70,000, driven by several factors including Harris's support for cryptocurrencies, Trump's 60% chance of winning, and low interest rates. Bulls aim to reach $72,000 in the short term, while bearish investors hope to maintain the price at $66,500. QCP's report indicated that ETH caught up with BTC over the weekend, rising 2% during low liquidity periods on Sunday. BTC and ETH are approaching key resistance levels, with BTC at $70,000 and ETH at $2800. Breaking through these levels may attract significant retail interest. With only 15 days left until the U.S. election and a strong performance in the stock market, market sentiment is optimistic, with risk reversals across various time horizons turning towards bullish options. There are no major catalysts this week, so the crypto market is expected to fluctuate around these levels, attempting to break through higher prices. On October 21, the U.S. spot BTC ETF saw a net inflow of $297.6 million (BlackRock's IBIT saw inflows of $332 million), marking seven consecutive days of net inflows. The U.S. spot ETH ETF experienced a net outflow of $20.8 million (Grayscale's ETHE saw outflows of $29.6 million). Since its launch, the U.S. BTC spot ETF has accumulated a net inflow of $21.303 billion, setting a new historical high. Among them: BlackRock's IBIT has accumulated a net inflow of $23.169 billion; Fidelity's FBTC has accumulated a net inflow of $10.31 billion; Grayscale's GBTC has accumulated a net outflow of $20.055 billion. The Block reported that BTC options traders are increasingly focused on call options with strike prices over $80,000 expiring in November, with the market expecting two significant events next month: the U.S. election on November 5 and the Fed's interest rate decision on November 8. Currently, the most significant open interest in BTC options is for those expiring on November 8, coinciding with the Fed meeting day and a few days after the U.S. election, clearly skewed towards bullish options.
On Tuesday, U.S. stocks opened lower again, with the S&P 500 index down 0.2%, and Bitcoin following suit. The spot price of gold rose to $2744.07 per ounce, an increase of 0.8%, continuing to break historical highs. On Monday, U.S. stocks closed with Nvidia rising 4%, and its market capitalization exceeding $3.5 trillion. Citigroup raised its three-month gold price forecast, citing that the U.S. job market may deteriorate further, the Fed's rate cuts, and physical and ETF buying, adjusting the three-month price expectation from the previous $2700 to $2800, with 6-12 month expectations at $3000. Federal Reserve's Daly stated: no signs indicate that the Fed will stop cutting rates, and if inflation continues to decline, even if the economy performs strongly, he hopes to maintain an open attitude towards further easing to prevent further weakness in the labor market, with a reasonable estimate of the 'neutral' rate between 2.5% and 3% (current rate 4.75-5.0%). Bernstein analyst Gautam Chhugani stated: BTC, like other risk assets, is increasingly seen by the market as having a greater likelihood of Trump winning the U.S. election, which supports cryptocurrencies, while Harris also made an optimistic and clearer statement on crypto policy, reducing the market's concerns about downside risks. The U.S. spot BTC ETF has returned to a strong net inflow state, reaching $2.1 billion last week. Bitfinex reported that as BTC approaches the $70,000 mark, it will face its first real resistance test, supported by macroeconomic factors such as potential Fed rate cuts, increased liquidity, and the potential for an improved U.S. crypto regulatory environment. If BTC breaks through the $70,000 resistance, it may replicate the strong performance from October 2023, when BTC soared after breaking through the $30,000 mark.
There are no major catalysts this week. In terms of macro data, the focus will be on the initial jobless claims numbers released on Thursday, as the market will look for signals of the Fed's rate-cutting path. Last week, the U.S. Securities and Exchange Commission approved the NYSE to conduct options trading based on the BTC spot ETF, which is expected to provide more liquidity to the market. Matrixport believes that trading volume will tilt towards BlackRock's IBIT, attracting more institutional investors. In the past week, BlackRock's IBIT has accumulated an additional 16,975 BTC, approximately $1.17 billion (IBIT ranks third in the annual fund inflow list). Currently, expectations for early November include the election on the 5th, where Trump's chances of winning are high; the rate-setting meeting on the 8th, with a 90% probability of a 25 basis point cut, both of which are favorable for the crypto market. Meanwhile, a continued 25 basis point rate cut by the Fed in December is also a high probability event. Based on the forthcoming easing monetary policy, several investment banks have recently raised their year-end gold price and S&P 500 index expectations. Bitcoin saw a rebound of about 10% last week, facing resistance at $70,000. The trend remains bullish, and short-term resistance will not change the bullish outlook for the year-end. The S&P 500 index, Dow Jones index, and gold prices have successively broken historical highs, and it is only a matter of time before the Nasdaq index and Bitcoin also reach new highs (currently, Bitcoin is about 10% away from its new high, and the Nasdaq index is about 0.7% away).
