ETH achieved its largest single-day increase since August. Has the self-fulfilling prophecy of "October rise" come true?

Author: 1912212.eth, Foresight News

The significant market correction at the beginning of October has left some investors filled with doubts, worrying that this October, which historically maintains an upward trend, might be "different" this time. As a result, history seems to always prove that "this time is no different."

After BTC surged to a peak of $66,000 at the end of September, it did not stop there but instead experienced a thrilling pullback, plunging to a low of $59,000. However, it is precisely this volatility that has given rise to an even more powerful rebound storm! Since October 11, the market situation has changed dramatically, with a sharp daily increase of 3.67%, signaling the return of the bullish trend, as the price surged back to the $63,000 high, and then galloped to $66,500.

Meanwhile, Ethereum also broke free from its shackles, rising from $2,300 to $2,650, with a daily increase of over 6.52%, marking the largest single-day increase since August.

In this market ignited by passion and hope, various sectors such as public chains SUI, SEI, APT, stablecoins ENA, AI sector ARKM, WLD, and memes have all seen significant surges.

In terms of contract data, short positions suffered heavy losses. In the past 24 hours, the total liquidation across the network reached $246 million, with short positions accounting for $210 million. The open interest for BTC also soared above $37 billion.

Are we really witnessing the start of the second half of the bull market with altcoins dancing wildly?

Large Net Inflows in BTC Spot ETF in a Single Day

Since the beginning of October, although there has been some net outflow of funds, it has generally balanced with net inflows. Starting from October 8, there were three consecutive days of net outflows, totaling nearly $180 million.

On October 11, the data saw a major reversal, with Bitcoin spot ETF experiencing a net inflow of $253.54 million in a single day, setting a new single-day net inflow record for October. Following the substantial inflow of off-exchange funds, BTC's price also saw a significant rise on the same day.

The confidence of off-exchange funds remains relatively strong.

The Federal Reserve Will Continue to Cut Rates, Market Expectations Stabilize

This week, the U.S. released the CPI and PPI inflation data for September. Both the overall CPI and core CPI year-on-year and month-on-month increases exceeded expectations, although the year-on-year CPI increase of 2.4% still marked the lowest since February 2021. The PPI remained flat compared to the previous month, indicating further cooling of inflation.

Goldman Sachs economists pointed out that although the CPI and PPI inflation data for September were mixed, the final readings were still close to expectations, indicating that U.S. inflation is moving towards the Federal Reserve's 2% target, and the Fed is getting closer to its inflation goal.

After the release of these two major inflation data this week, traders are almost certain to bet that the Federal Reserve will cut rates by a quarter of a percentage point in its meetings in November and December.

U.S. Presidential Election

Historically, the results of U.S. presidential elections often lead to bullish trends in the crypto market. On November 5, the results of the U.S. presidential election will soon be revealed, with only 20 days remaining.

Additionally, Bloomberg reported that even Kamala Harris, a presidential candidate who has not had much close connection with the crypto market, is working hard for votes.

On Monday, Harris proposed a new plan to provide loans to Black entrepreneurs and others facing barriers to financing. According to Harris's campaign outline aimed at attracting Black male voters, the plan will offer 1 million loans, with up to $20,000 potentially forgiven. Harris also promised to support a regulatory framework for cryptocurrencies, providing more investment certainty for 20% of Black Americans who own or have owned digital assets.

The Trump family's DeFi lending project, World Liberty Financial, has also been active recently, bringing in several experienced executives and planning to publicly issue WLFI tokens.

Data from Polymarket shows that, so far, Trump's chances of winning have significantly outpaced Harris's.

The market currently leans towards the belief that Trump's election as president will be beneficial for the crypto market. However, given that all U.S. presidential candidates have released friendly statements and views towards crypto, the negative impact is minimal regardless of who takes office.

During the bull market from 2016 to mid-2020, Trump, a Republican, was in power, while from 2020 to 2024, Biden, a Democrat, will be in power. The crypto market, led by BTC, has experienced strong bull markets during both of their terms.

From the historical performance of the past two cycles, the ascent of the crypto market has not been affected by whether a Republican or Democrat presidential candidate takes office.

After the election results are officially announced, some funds that have chosen to wait and see may change their hesitant style and boldly bet on the crypto market.

Future Market Trends

Coinbase Analysts: Macro Factors Affecting Cryptocurrency Performance Are Shifting from Monetary Policy to U.S. Election Results

Coinbase analysts David Duong and David Han stated that despite Bitcoin's lackluster price movement this week, "market sentiment has remained largely unchanged, as evidenced by the stable perpetual contract funding rates and open interest over the past week." They pointed out that macro factors affecting cryptocurrency performance are shifting from monetary policy to U.S. election results, even though recent increases in CPI and core PPI have kept market expectations for rate cuts relatively stable.

They also mentioned that China's fiscal policy briefing this Saturday could indirectly impact the cryptocurrency market, especially during a period when many markets will be closed. The cryptocurrency market may be used to express proxy views on the scale and intensity of any fiscal policy announcements.

Bitfinex: The Actual Price of Short-Term Holders Becomes a Key Resistance Level for BTC

Bitfinex Alpha's latest analysis report emphasizes that the actual price of short-term holders (around $63,000) has become a key resistance level. A breakthrough at this level could trigger further increases, while failure could lead to a retest of support levels at $59,000 or even $55,000.

Bitfinex Alpha believes that the market remains in a passive state, and future trends will depend on whether Bitcoin can break through the actual price of short-term holders. They advise traders to be cautious of potential pullbacks while preparing for a possible strong rebound.