With the double positives of the election and interest rate cut, will BTC see over 80,000 Usdt in November?
Original B Circle's Yongqi, October 31, 2024, 10:54, Beijing
During this period, I have been busy with offline communication activities for the private board members, and just in the past two days, the trend has effectively broken through $72,000 for BTC. This is the first effective breakthrough in the past six months; is this the double positive release of the election + interest rate cut, or is the halving cycle bull market starting? Today we will take some time for market analysis.
Next, I will help you recharge your faith from the following dimensions:
Analysis of the upcoming market trend for BTC.
In the US election, will Trump's election lead to BTC breaking through $100,000?
What kind of benefit will the 25 basis points rate cut on November 8 bring to the market?
What are the monthly return rates for BTC and the total contract holdings across the network?
Inflows data for the Bitcoin spot ETF
Ethereum, is there still a bull market in this round?
What has been Bitcoin's market value share in past bull markets?
How should we manage and operate our positions now?
Analysis of the upcoming market trend for BTC
Today is October 31, 2024. At this time, do not hesitate; the overall trend has effectively broken upward. Currently, there is over a 90% probability that this wave will continue to rise to nearly $85,000. The first resistance level for Ethereum is still around $3,000. Once it breaks through the $4,000 position, it will be quite easy. However, relative to ETH, it is still quite difficult to achieve a large-scale breakout in a short time. Those who are bearish or want to short should pay attention; don't go against the trend!
In the two above charts, I have also detailed the entire BTC trend during this stage in the past three bull markets for reference. Although we cannot take a boat to seek a sword, history can sometimes be remarkably similar.
A: In the past three bull markets, major rallies typically started at the end of October.
B: A wave of crazy bull market will start in the next 6 months from this point in time.
Large amounts of USDC minted on the Ethereum chain exceed 250 million; are major institutions buying again? Or have these institutions prepared sufficient ammunition for this round of rally?
In the US election, will Trump's election lead to BTC breaking through $100,000?
First, it can be stated clearly: as long as Trump is elected, the price of Bitcoin in this bull market will likely be around $250,000 to $300,000. I explained in detail why in this article: what basis do institutions have to predict that the BTC price will break through 1 million Usdt each in the future?
In the short term, after Trump's election victory, the price of BTC is very likely to break above $100,000 around Christmas. Once this price level is surpassed, market sentiment will be FOMO-driven, and with the continuous buying by ETF institutions, the overall market liquidity will be exhausted, making it easy for BTC's price to be pushed higher!
If Trump is elected, policy will definitely favor crypto because Trump has previously claimed he wants to make BTC a national reserve currency. This is quite strong; it might change the nature of crypto from something viewed as a scam for decades to something recognized as legitimate!
This is also the reason Buffett has been frantically selling US stocks recently, because if this capital gains tax is implemented, the wealthy will have to sell assets to gather cash to pay taxes. As for what happens after the election, who knows?
Generally, the three months after the election are a relatively good time. If three months later, there are no economic issues, and the Federal Reserve continues to maintain a trend of monetary easing, the risk markets may perform even better.
From the current trend, the Federal Reserve's interest rate cut cycle generally lasts between 16 to 18 months, meaning the third and fourth quarters of 2026 are likely to welcome a low-interest rate cycle. During this period, if the US economy enters a recession, it is not excluded that the Federal Reserve will adopt QE methods to stimulate the recovery of the US economy, which is real monetary easing. In addition, there will be quantitative easing, which will greatly help increase liquidity.
What kind of benefit will the 25 basis points rate cut on November 8 bring to the market?
Interest rate cuts combined with the fourth halving cycle bull market is a clear positive! The 50 basis points rate cut in September has already demonstrated the Federal Reserve's determination in this round, and if the November cut is also a normal 50 basis points, that would be a significant positive, but the probability is low; a 25 basis points cut is basically certain.
Interest rate cuts combined with the election, plus the already clear halving cycle bull market, so the most correct operation next is to hold your BTC; do not easily get off now.
What are the monthly return rates for BTC and the total contract holdings across the network?
Bitcoin's monthly return rate:
Here you can actually refer to the entire Bitcoin investment return comparison in the fourth quarter of 2020 and the first quarter of 2021, and then compare it with Ethereum. So you must firmly believe that as long as you endure until: when the flowers bloom, you will surely smile among them!
Total contract holding data across the network:
The total contract holding transaction volume on the network is currently proportional to the overall price, showing no significant divergence, so hold onto your chips.
Actually, I want to remind everyone here:
1. Manage your positions well; we are all human, not gods. You must act within your limits with high-leverage contracts.
2. A crazy bull market is the best opportunity to make money, but it is also where retail investors lose the most.
3. Learn more and seek advice; a small detail can determine how many more hundreds of thousands you can earn this round.
Inflows data for the Bitcoin spot ETF
The Bitcoin spot ETF is making $BTC less special.
1. How has the ETF performed since its launch? What about the future? In the year following the launch, the spot BTC ETF reached a scale of about $63 billion, with its BTC holdings accounting for about 4.5% of the total; if we include the BTC ETF market holdings in other regions, its share accounts for about 5.2% of the total.
(1) BlackRock occupies the largest share in this field, over 40%; (2) Despite ongoing net outflows from Grayscale, GBTC still holds the second market share; (3) If we add Fidelity, which holds third place, the market shares of the three together account for about 84%.
Since the launch of the ETF, BTC has been in positive inflow for most of the time (60%). Driven by this trend, we can see that the launch of the Bitcoin spot ETF has further pushed the phenomenon of BTC demand exceeding supply, especially since this year also experienced a Bitcoin halving event, which exacerbated this supply-demand imbalance.
According to Glassnode data, the existence of spot ETFs brings an average daily demand of 1,100 $BTC to the market. Comparing this data with the situation after the launch of gold ETFs: the flow of BTC ETFs has already surpassed the early performance of the first gold ETF launched in November 2004.
Currently, the market size of gold ETFs is about $131 billion, while the US spot BTC ETF market has reached about $63.3 billion. Additionally, the initial gold ETF application included only 95 institutional investors, in stark contrast to the more than 1,200 institutional investors currently investing in spot BTC ETFs. Although this is influenced by factors such as the capital market environment and the speed of internet dissemination, it also reflects the institutional consensus around BTC.
2. Bitcoin ETF VS Ethereum ETF
The overall performance of Ethereum ETFs is significantly weaker than that of Bitcoin ETFs; since their launch, they have only had a positive net inflow for 30% of the time, showing a downward trend since inception. Coupled with the fact that the Ethereum ETF was launched during the downturn of the secondary market, this further suppressed Ethereum's inflow. When comparing the market impact of BTC and ETH ETFs, normalizing the net inflow of ETFs by spot trading volume shows that the impact of BTC ETFs on Bitcoin is significantly greater than that of ETH ETFs on Ethereum.
3. Sources of buyers for spot ETFs
The conclusion is: this means new ETF capital inflows, which may be liquidity that originally existed in the market. This indicates that the spot ETF is playing a dual role: not only attracting new investors but also drawing in existing investors who prefer the regulated structure of ETFs over other more complex options.
The launch of these spot ETFs is siphoning off liquidity that originally belonged to the market. If people purchase BTC on exchanges, they may temporarily switch to other altcoins, but if they choose to buy BTC ETFs on brokerage platforms, their funds are more likely to be locked on those platforms rather than flowing to other places on-chain or within the industry.
However, as more and more institutions open public solicitations, the external market demand for Bitcoin in the ETF space will further expand. However, combined with my previous point, the liquidity of the original secondary crypto market may also be further siphoned off: ETFs are a double-edged sword, and this sword may eventually be directed at the necks of on-chain altcoins, with the inflow and outflow of the ETF market becoming a new market indicator.
Ethereum, is there still a bull market in this round?
Currently, as the ETH/BTC exchange rate has dropped to a new low since the peak of the 2021 bull market, various bearish statements about Ethereum have begun to emerge. The bearish views mainly focus on two aspects: first, the large-scale expansion of Layer2 has created a significant 'vampire effect' on the main chain, gradually weakening its core position; second, the rise of high-performance public chains like Solana and SUI is continuously eating into Ethereum's market share, leading it toward decline.
In fact, the direction of blockchain development has always been to continuously reduce costs and increase efficiency while achieving maximum decentralization. The prosperity of the Layer2 ecosystem allows Ethereum to significantly enhance processing capacity and efficiency while maintaining security and decentralization, promoting application diversification and meeting the demands of more users. This aligns perfectly with the core values of blockchain and is an inevitable trend of continuous optimization and development.
First, although some Ethereum businesses have moved to Layer2, the vast majority of Layer2 still rely on Layer1 as a data availability layer. As the activity of Layer2 transactions continues to increase, the frequency and scale of data being sent back to Layer1 will also increase, leading to greater consumption of Ethereum GAS.
Secondly, the growth of Layer2 networks has significantly increased the demand for Layer1 bridging and staking. For example, in cross-chain processes, asset locking (smart contracts) consumes Ethereum GAS, while ETH, as the most important value medium in the network, is also widely used for economic guarantees in cross-chain mainnet verification. Additionally, some bridging protocols also record transaction data on Ethereum to ensure the quantity and status of asset transfers meet expectations, which also consumes Ethereum GAS.
Even if some Layer2 networks reduce costs by using third-party data availability layers like Celestia, or to increase the demand for governance tokens, the GAS for Layer2 networks is still derived from ETH; all transactions ultimately need to settle on the Ethereum mainnet. As long as asset and transaction security issues are involved, they cannot bypass Ethereum.
In the Layer2 era, Ethereum plays more of a decentralized 'central clearing bank' role, responsible for the security and efficiency of all transactions in the ecosystem. As the Layer2 ecosystem continues to grow, Ethereum's network effects will see unprecedented enhancement, and the demand for Ethereum collateral and Ethereum GAS will explode. The current price slump is still due to the overall low demand of the network; as long as a new application breakthrough is found, all difficulties will be easily resolved.
Despite the rise of high-performance public chains like Solana and SUI eating into some of ETH's market share, Ethereum remains the unshakable leader in the POS field, mainly reflected in two aspects:
1. Thanks to the developed Layer2 ecosystem, Ethereum maintains high decentralization while achieving scalability. In contrast, other public chains generally enhance their scalability at the cost of decentralization, resulting in a security level far below that of Ethereum.
Secondly, in terms of ecological development, Ethereum's advantages still lead by a wide margin. According to the latest data from Defillama, the current TVL of the Ethereum ecosystem (including Layer2) is $72 billion, and the stablecoin scale is $83.6 billion. Meanwhile, the Solana ecosystem, seen as an 'Ethereum killer', has a total TVL of only $7 billion (with MEME coins accounting for over 40%), and stablecoin scale is only $3.7 billion. This shows a nearly tiered leading gap.
What has been Bitcoin's market value share in past bull markets?
The four-year cycle of BTC is still very similar; the current market share ratio is very close to that of four years ago, both around 59%. Two months later, the market share ratio reached a peak of about 73%.
When the market share is at its highest, BTC has not peaked yet; it is only halfway up and will continue to rise. When BTC rises to 120,000, the market share may reach its highest, but the price has not peaked yet. Remember, it is also possible to rise to 250,000 Usdt.
So referring to the market situation in 2020, the script for the second half of 2024 will be very similar. In December 2024, when the price reaches 120,000, the market share will peak at 70%. Most altcoins will start to stir, and then BTC and altcoins will rise together. After the big pie peaks (180,000 to 250,000), it will stabilize with no rise for old mainstream coins, and the doomsday chariot will also start.
How should we manage and operate our positions now?
At what price level should BTC start selling?
1. At least around December 2025, which references 16 months after the interest rate cut, market sentiment will be at its highest FOMO point.
2. A major market rally typically starts about six months after the halving; about a year and a half after the halving, the bull market peaks, which will be around November 2025.
3. In the next 12 months or so, do not easily sell the BTC in your hands, nor should you easily swing trade!
When to bottom out ETH?
1. First, I need to see ETH/BTC stabilize after hitting a bottom for at least one quarter without breaking new lows.
2. Macroeconomic liquidity is gradually moving toward comprehensive easing, with the Federal Reserve cutting rates to below 3.5%.
3. Secondly, we need to see how during this period, ETH gradually strengthens under the influence of BTC.
4. By judging BTC's price trend to find a relatively low price point, it becomes easier to identify a healthy ETH/BTC trend with a lower ETH price for bottoming out.
5. Keep holding ETH; it is still the big brother in the public chain and remains the most trustworthy!
When will altcoins experience a major breakout?
1. At least BTC will break above $120,000, and ETH can effectively stand above $6,000. Market sentiment will rise, and retail investors will prefer lower-priced tokens, at which point altcoins may see a surge.
2. In this round of altcoins, it is difficult for many hundred-fold or thousand-fold coins to emerge like in the last round. Currently, the BTC ETF is attracting a lot of money, and it is not unreasonable to say it is a BTC bull.
3. When operating altcoins, you must manage your positions well; never get too emotionally attached, you are here to make money!
Finally: a crazy bull market is about to start, hold on to your chips and don't easily run away!
Previous quality content:
Key Point: What basis do institutions have to predict that the BTC price will break through 1 million Usdt each in the future?
1. In the village—real estate, even the big A is struggling; we have made enough money, what should we invest in?
2. Bro, if you hesitate to buy BTC, then please stay away from the crypto circle!
3. In this round of bull market, I only want to earn 10 times the return; how should I operate? Come to me and I will teach you!
4. Are you lacking profitable opportunities in the crypto circle? No, absolutely not! What you lack is an excellent guide.
5. What has been the BTC trend before and after the Federal Reserve's interest rate cuts over the past decade? [Has the net inflow of over 11 billion USDT in the past month been a bottoming out?]
6, 'Liu and Sun's Competition' in Hong Kong's Web 3.0, who will be the strongest king in the future?
7. The global financial black swan; over 320,000 people in the crypto circle face liquidation today, with a liquidation scale exceeding 1.2 billion USDT!
8. The world's largest public chain—Ethereum [ETH]—has developed over the past decade and its future outlook.
9. The next best asset for global circulation—BTC
10. Which public chain will be the performance king of the future?
B Circle's Yongqi
Thank you for the encouragement and support for originality
