“Depending on your confidence level, decide the size of your bet.
——Redd Leo, founder of Bridgewater Associates (Principles)”
FUD Events
Last Friday, the crypto market experienced two notable episodes of FUD (Uncertainty and Doubt): one stemming from internal issues within the cryptocurrency ecosystem, and the other stemming from a sudden rise in geopolitical risks. Therefore, in the current market environment, it is crucial for every investor to remain vigilant, because possible FUD incidents in the future are often unexpected and may lead to unforeseen market fluctuations.
On the one hand, the Wall Street Journal reported that the U.S. Department of Justice launched a criminal investigation into Tether, the issuer of the stablecoin USDT, causing the price of Bitcoin to fall by 2.5%. After Tether’s CEO denied the allegations related to the Wall Street Journal, the market quickly recovered.
· On the other hand, the sudden rise in geopolitical risks caused Bitcoin to experience violent fluctuations in a short period of time. The price once fell to $65,500, and then quickly rebounded to $67,000. In contrast, the impact of altcoins was particularly significant, with losses even reaching double digits.
In this incident, Bitcoin demonstrated strong resilience, quickly absorbing the impact of this potential black swan event without causing major consequences to the market.
Israel air strikes Iran
Bitcoin Analysis
Risk markets are increasingly optimistic about Bitcoin, and while the current cycle seems to be lagging slightly, we are near a critical point where Bitcoin began to surge in previous cycles. I have always believed and still hold the view that Bitcoin will begin to accelerate after the 2024 US presidential election.
Therefore, no matter which candidate is elected, I believe Bitcoin will perform well in 2025. The current price of Bitcoin is $67,232.
As long as Bitcoin price remains above the blue zone, above $59,000, there is every reason to be optimistic. If the monthly close falls below $58,000, I think objective investors and traders should realize that a major trend shift has occurred.
2021 ATH monthly close (resistance) is turning into support
Bitcoin price performance during halving
However, the market is averse to uncertainty, and the eve of this election coincides with an important moment of geopolitical uncertainty in the Middle East. The crypto market will pay close attention to changes in this situation.
Bitcoin Spot ETF
Bitcoin spot ETFs from financial institutions such as BlackRock continue to actively purchase Bitcoin, and the leader BlackRock continues to show strong confidence in this asset.
U.S. 10-Year Treasury Bond
After the interest rate cut, the yield on the US 10-year Treasury bond rose sharply (corresponding to a large sell-off of bonds), especially the selling pressure on the long-term 10-year Treasury bond continued to increase.
The Fed's rhetoric and actions may suggest that the war on inflation has been won, but bond investors clearly see it differently. Investors are currently reluctant to push long-term bond yields lower, a strong signal that bond investors are concerned about future inflation increases.
S&P 500
After a relatively strong run this year, the S&P 500 appears to be easing ahead of the election (November 5). About 37% of the companies in the S&P 500 have reported financial results for the third quarter of 2024. Of these companies, 75% exceeded market expectations for net income, and 59% also exceeded expectations for total revenue, with an overall net profit margin of 12%.
But technically, the index is clearly in the process of pulling back from its highs and breadth is pulling back as well. I think part of that is people pulling back and waiting.
In short, in the context of the current increasingly tense global political environment, financial markets and risk markets are facing significant uncertainty. In this case, investors should remain calm and conduct objective analysis. A rational decision-making process is crucial, and investors should have a thorough understanding of the potential impact of market dynamics, macroeconomic indicators and geopolitical factors on asset prices.
Note: All content represents the author's personal views only, is not investment advice, and should not be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice on tax consequences.
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