With the dual benefits of the election and interest rate cuts, will we see BTC above 80,000 Usdt in November?
Original B circle's Yongqi, October 31, 2024, 10:54, Beijing
Recently, I have been busy with offline communication activities for private board members. Just now, the big trend has effectively broken above $72,000 for BTC, which is the first effective breakout in the past six months. Is this a dual benefit of the election + interest rate cut being released in advance, or is it the start of the bull market cycle after halving? Today, we will take some time to conduct a market analysis.
Next, I will help you recharge your faith from the following dimensions:
Analysis of the trend of BTC's upcoming market.
US elections, will Trump's election cause BTC to break $100,000?
How much benefit will the 25 basis point interest rate cut on November 8 bring to the market?
What are the monthly return rates of BTC and the total contract holding volume across the network?
Data on the inflow of Bitcoin spot ETFs.
Ethereum, is there still a bull market in this round?
What was Bitcoin's market capitalization share during the past bull markets?
How should we manage and operate our positions right now?
Analysis of the trend of BTC's upcoming market
Today is October 31, 2024; at this moment, do not hesitate at all; the big trend has effectively broken upwards. Currently, there is over a 90% probability that this wave will continue to rise to around $85,000. The first pressure point for Ethereum is still around $3,000. Once it breaks the $4,000 position, it will be very easy. However, compared to ETH, it is still challenging to achieve a significant breakout in a short period; those looking to short or have a bearish view should be cautious and not go against the trend!
In the above two charts, I have also detailed the entire BTC trend during this stage in the past three bull markets; you can refer to it. Although you can’t be too rigid in your analysis, history can sometimes be remarkably similar.
A: In the past 3 bull markets, major rallies have always started in late October.
B: A wave of crazy bull market will start in the 6 months following this time point.
On the Ethereum chain, over 250 million USDC has been minted; is this a large institution buying more and more? Or has this wave of increases been prepared with ample ammunition by institutions in advance?
US elections, will Trump's election cause BTC to break $100,000?
First, it is clear that as long as Trump is elected, the price of Bitcoin in this bull market is likely to be around $250,000 to $300,000. As for why, I detailed it in this article: On what basis do institutions predict that BTC prices will break through 1 million Usdt each in the future?
In the short term, after Trump's electoral victory, the price of BTC is highly likely to break above $100,000 around Christmas. Once it surpasses this price point, the entire market sentiment may be driven by FOMO, especially as ETF institutions keep buying, which could easily push the price of BTC even higher!
If Trump is elected, his policies will certainly favor crypto, as he has previously hinted at making BTC a national reserve currency. This is very strong and may change the nature of crypto! From being regarded as a scam for decades to suddenly being seen as legitimate!
This is also the reason why Buffett has been frantically selling US stocks recently, because if this capital gains tax is implemented, the rich can only sell assets and then gather cash to pay taxes. As for how things will go after the election?
Generally speaking, the three months after the election are a relatively good time. If there are no economic issues three months later and the Federal Reserve continues to maintain a trend of monetary easing, then 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 that the third and fourth quarters of 2026 are likely to welcome a low-interest-rate cycle. During this time, if the US economy enters a recession, the Federal Reserve may adopt QE to stimulate the recovery of the US economy, which is true monetary easing. In addition, there is also the expansion of the balance sheet, both of which will greatly help increase liquidity.
How much benefit will the 25 basis point interest rate cut on November 8 bring to the market?
Interest rate cuts combined with the fourth halving cycle bull market, this is a clear positive! The 50 basis point rate cut in September has already indicated the Federal Reserve's determination in this round; if the upcoming November cut is also a normal 50 basis points, it would be a significant benefit, but the probability is very low, with a 25 basis point cut basically being a certainty.
Interest rate cuts combined with the election, along with the already clear halving cycle bull market, thus the most correct operation is to hold onto your BTC; do not easily exit at this moment.
What are the monthly return rates of BTC and the total contract holding volume across the network?
Monthly return rate of Bitcoin:
Here, you can actually refer to the investment return rate of Bitcoin in the fourth quarter of 2020 and the first quarter of 2021, then compare it with Ethereum. So you must firmly believe that as long as you endure until: when the flowers bloom, you will surely be smiling among them!
Data on the overall contract holdings across the network:
The overall contract holding turnover across the network is currently proportional to the overall price, with no significant divergence observed, so hold onto your chips.
Actually, I want to remind everyone here:
1, Manage your positions well; we are all human, not gods. Your high-leverage contracts must be within your means.
2, The crazy bull market is the best opportunity to make money, but it is also where retail investors lose the most.
3, Learn more, ask more; a small detail can determine how much more you can earn this round.
Data on the inflow of Bitcoin spot ETFs.
The Bitcoin spot ETF is making $BTC less special.
1. How has the ETF performed since its launch? How will it perform in the future? The spot BTC ETF reached about $63 billion in scale within a year of its launch, with its BTC holdings accounting for about 4.5% of the total. If we include the holdings of BTC ETFs in other regions, its share is approximately 5.2% of the total.
(1) BlackRock occupies the largest share in this field, over 40%; (2) Grayscale, despite continuous net outflows, still holds the second-largest market share; (3) Adding Fidelity, which is in third place, brings their combined market share to about 84%.
Since the launch of the ETF, BTC has seen positive inflows for most of the time (60%). Under this trend, it can be seen that the launch of the Bitcoin spot ETF has further driven the phenomenon of BTC demand exceeding supply, especially since this year has also experienced the Bitcoin halving event, further exacerbating 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 to 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 applications only included 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 indirectly reflects the institutional consensus around BTC.
2. Bitcoin ETF VS Ethereum ETF
The overall performance of the Ethereum ETF is significantly weaker than that of the Bitcoin ETF, with only 30% of the time being positive inflow since its launch, showing a downward trend. Additionally, the timing of the Ethereum ETF's launch coincided with the downturn in the secondary market, further suppressing Ethereum inflows. When comparing the market impact of BTC and ETH ETFs, standardizing the net inflow of ETFs based on spot trading volume shows that the impact of the BTC ETF on Bitcoin is significantly greater than that of the ETH ETF on Ethereum.
3. Sources of buyers for spot ETFs.
The conclusion is: This suggests that the inflow of new ETF funds may be liquidity that originally existed in the market. It indicates that spot ETFs are playing a dual role: not only attracting new investors but also enticing 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 on-market. If BTC is purchased on exchanges, these individuals may temporarily shift to other altcoins. However, if they choose to buy BTC ETFs through brokers or other platforms, their funds are more likely to be locked into these platforms rather than flowing elsewhere in the blockchain or industry.
However, as more and more institutions open public subscriptions, the external market demand for Bitcoin in the ETF space will further expand. Yet, integrating my previous point, the liquidity of the original crypto secondary market may also be further siphoned. ETFs are undoubtedly a double-edged sword, and this sword may ultimately swing towards the necks of on-market altcoins, making the inflow and outflow of ETF markets a new market indicator.
Ethereum, is there still a bull market in this round?
Currently, as the ETH/BTC exchange rate has fallen to a new low since the peak of the 2021 bull market, various bearish sentiments surrounding Ethereum are becoming increasingly rampant. The bearish views mainly focus on two aspects: first, the large-scale expansion of Layer2 has created a significant 'bloodsucking effect' on the main chain, gradually weakening its core position; second, the rise of high-performance public chains such as Solana and SUI is continuously eating into Ethereum's market share, leading it towards decline.
In fact, the direction of blockchain development has always aimed to achieve decentralization while continuously reducing costs and increasing efficiency. The prosperity of the Layer2 ecosystem has enabled Ethereum to significantly enhance its processing capabilities and efficiency while maintaining security and decentralization, promoting the diversification of applications and meeting more user needs. This completely aligns with the core values of blockchain and is an inevitable trend of continuous optimization and development.
First, although some businesses of Ethereum have moved to Layer2, the vast majority of Layer2 still rely on Layer1 as a data availability layer. As the activity of Layer2 transactions increases, the frequency and scale of data returning to Layer1 also increase, resulting in higher 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, being 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 that the quantity and status of asset transfers meet expectations, which also consumes Ethereum GAS.
Even if some Layer2s lower fees by adopting third-party data availability layers like Celestia or to increase the demand for governance tokens, changing the GAS of Layer2 networks from ETH to governance tokens, all transactions still need to settle on the Ethereum mainnet. As long as it involves asset and transaction security issues, it ultimately cannot avoid 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 effect will receive unprecedented enhancement, leading to explosive growth in demand for Ethereum collateral and Ethereum GAS. The current low price still reflects a low total demand for the network; as long as new application breakthroughs are found, all difficulties will be resolved.
Although the rise of high-performance public chains like Solana and SUI has indeed eaten into some of ETH's market share, in the POS field, Ethereum remains the unshakable leader, primarily reflected in two aspects:
First, thanks to the developed Layer2 ecosystem, Ethereum has achieved scalability while maintaining a high degree of decentralization. In contrast, other public chains generally enhance scalability by sacrificing decentralization, which leads to their network security not reaching Ethereum's level.
Second, in terms of ecological development, Ethereum's advantages are still far ahead. 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. In contrast, the Solana ecosystem, which is viewed as a 'Ethereum killer,' has a total TVL of only $7 billion (with MEME coins accounting for over 40%), and a stablecoin scale of only $3.7 billion. The gap is almost a chasm.
What was Bitcoin's market capitalization share during the past bull markets?
BTC's four-year cycle is still very similar, the current market share ratio is very close to that of four years ago, both around 59%, and in two months, the market share ratio reached a peak of around 73%.
At the highest market share, BTC didn't peak, but was only halfway up, and it will continue to rise. When BTC rises to 120,000, the market share may reach its peak, but the price has not peaked yet; remember, it is also possible to rise to 250,000 Usd.
Thus, referencing the trends from 2020, the script for the second half of 2024 will likely be very similar. In December 2024, when the price reaches 120,000, the market share will peak at 70%, and most altcoins will begin to stir, then BTC and altcoins will rise together, with the big pie peaking (180,000—250,000) and then going sideways, while the old mainstream coins that haven’t risen will start their doomsday journey.
How should we manage and operate our positions right now?
At what position should BTC be sold?
1, At least around December 2025, which is 16 months after the reference for interest rate cuts, market sentiment will be at its highest point of FOMO.
2, About 6 months after the halving, a major market rally begins, and about a year and a half after the halving, the bull market peaks. This means November 2025.
3, In the next 12 months or so, do not easily sell the BTC in your hands, and do not easily swing trade!
When to bottom buy ETH?
1. First, I need to see ETH/BTC stabilize after hitting a bottom, showing at least one quarter of horizontal movement without breaking new lows;
2. Macroeconomic liquidity is gradually moving towards comprehensive easing, with the Federal Reserve lowering interest rates to below 3.5%.
3. Additionally, it is necessary to see how ETH gradually hardens under the influence of BTC during this period.
4. Judging a relatively low price based on BTC's price trend makes it easy to find a healthy ETH/BTC trend with a lower ETH price for bottom buying.
5. Persist in holding ETH; it remains the big brother in public chains and is still the most trustworthy!
When will altcoins welcome a major breakout?
1, At least BTC must break above $120,000, while ETH can effectively stand above $6,000. The market's sentiment will rise, and the retail investors will prefer lower-priced tokens. At this point, altcoins may see a wave of breakout.
2, This round of altcoins is unlikely to produce many hundredfold or thousandfold coins as the previous round did. Currently, it seems that the Bitcoin ETF is attracting a lot of capital, and it’s not without reason to say that this bull market belongs to BTC.
3, For altcoin operations, you must manage your positions well and avoid getting too emotionally attached; you are here to make money!
Finally: The crazy bull market is about to begin, hold onto your chips, don’t run away easily!
Previous high-quality content:
Key point: On what basis do institutions predict that the BTC price will break through 1 million Usdt each in the future?
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B circle's Yongqi
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