Market analysis - BTC challenges historical high, US election will trigger severe volatility

BTC successfully broke through the $70000 mark on 10/29 yesterday, reaching a high of $73620, just one step away from the historical high of $73777 set in March this year.

Looking back at the past half year, BTC hit the $70000 range five times, but it failed to break through successfully, and even formed a red downward trend line for half a year above, accumulating a large amount of selling pressure. Finally, after six months of market reshuffle and shock, BTC broke through several pressure positions directly to challenge new highs, and the price trend was almost 90 degrees upward. Therefore, it is very likely that BTC will successfully break through the historical high. After the breakthrough, funds from within and outside the circle will flow in, and it may be the time when the real bull market will start.

In addition to BTC, DOGE has also performed very well in the past week. DOGE is also an old meme coin with the largest market value, so its popularity inside and outside the circle is quite high. The current increase is largely related to the recent rising momentum of Trump and Musk. Investors have bound up the relationship between DOGE and Musk, and Musk has strongly supported Trump. This week even began to analyze politics. So it can be imagined that if Trump is elected and Musk is jointly benefited, DOGE will not lack the topic of hype in the future, and even the relevant payment applications can be promoted. So if Trump is elected, it can be seen that DOGE will have a Bo celebrates the market.

Meanwhile, SOL also broke through $180 yesterday, and related ecosystem currencies such as RAY and JUP have shown strong gains. Compared to ETH, BTC has been very weak during the same period. It can be seen that BTC has been the strongest and most resilient currency in the past six months, while SOL/BTC has been almost flat in the past six months, indicating that SOL is also very strong compared to BTC. On the other hand, ETH/BTC continues to hit new lows. After BTC's sharp rise yesterday, the exchange rate has reached 0.036 BTC to 1 BTC, returning to the level of 2021. Since the beginning of the year, Bitcoin has risen by about 60%, while ETH has only risen by about 10%.

In summary, there is currently a strong bullish sentiment in the market, and holding BTC has become a consensus, and breaking through historical highs is only a matter of time. In the 10/16 weekly report, it was also suggested to hold more than 40% of BTC. Currently, BTC strategy is also in a full position, and the fluctuations between currencies in this bull market are very polarized. It can be seen that even though BTC is about to reach historical highs in the next few days, most altcoins are still relatively low, and established public chains are also struggling. The coin selection part will be very important in this bull market, and we will also replace the currencies in the follow-up investment group to cope with the possible bull market that may come next. However, the most important thing is risk management. The election is next week and the bilateral polls are similar, so it is difficult to predict the outcome. Therefore, conservative investors can reduce their holdings in a timely manner and invest after the election is confirmed.

Polling and Forecasting

The most influential issue for the market in the coming week is undoubtedly the US presidential election. According to the current poll results, the support of Trump and He Jinli is still tight. At present, the gap between the polls in seven key swing states is no more than 2 percentage points. It is difficult to determine who will win in the end. However, there are significant differences in predicting the market. At present, traders' bet results show that Trump has a 67.3% chance of winning, while He Jinli has dropped to 33.6%.

Historical statistical data for election year

How does the election affect the market?

The analysis company T. Rowe Price has produced a statistical report based on historical data from 1927 to the present to determine whether the election will have an impact on the performance of the US stock market. The results showed that before election day, the average return of the S&P 500 was generally higher than in non election years, but after election day, the stock market's returns during the 1-month, 6-month, and 12-month periods were significantly lower than the same period in non election years.

High probability of economic recession in election year

The possibility of economic recession is high. In over half (54%) of the past 24 presidential elections, the US economy entered a recession in the year following the election (as defined by the National Bureau of Economic Research (NBER)). This proportion is significantly higher than the average economic recession rate in other years of the presidential term: specifically, there is a 29% chance of an economic recession occurring in the second year of the presidential term, a 17% chance in the third year, and a 25% chance in election years.

In other words, the likelihood of the US economy entering a recession is relatively high within 12 months after the end of a presidential election year. This may be because the market has foreseen that the economy will weaken after the end of the election year, so the stock market may reflect this expectation at the end of the election year.

The impact of re-election on volatility

On the other hand, statistical data also indicates that when the current political party fails to stay in the White House, the volatility of the S&P 500 shows higher levels on average in the months leading up to and following the election (see Figure 5), which may reflect the uncertainty brought about by policy changes. In this case, the volatility is highest one month before the vote. There are two trends worth noting:

When the incumbent political party is re elected, the volatility on average decreases before the election and slightly increases after the election. When the current political party loses the election, volatility significantly increases before the vote and then falls back.

How will the cryptocurrency market change

The market still holds different views on the direction after the election

At present, there is significant divergence in the market regarding the performance of the cryptocurrency market after the election. At present, the market generally believes that if Trump wins, the market may expect a more relaxed regulatory environment, which is good news for the cryptocurrency market. Compared to the strict enforcement actions of the Democratic Party in recent years, Republican administrations have had a more lenient regulatory attitude towards cryptocurrencies in the past, which may promote innovation and investor confidence.

The recent rebound of Bitcoin is likely to be a bet that Trump will win the election. Edouard Hindi, chief investment officer of Tyr Capital, said in an interview with The Block, a foreign media, that no matter what the election results, traders may lower the price of Bitcoin after taking profits.

Meanwhile, Geoff Kendrick, Global Head of Digital Asset Research at Standard Chartered Bank, believes that the performance of the cryptocurrency market will depend on the election results. If the Republican Party sweeps Congress (referring to the Republican Party winning both houses of Congress), the target price for Bitcoin at the end of the year may rise to $125000. Conversely, if current US Vice President Kamala Harris wins the election, Bitcoin may fall.

Bitfinex pointed out in a report released on Monday that the uncertainty of the US election, the "Trump Trading" narrative and seasonal factors in the fourth quarter created a "perfect storm" for Bitcoin. Analysts believe that given the steady growth of Bitcoin call options and favorable seasonal factors in the fourth quarter, Bitcoin may break through a historic high of $73666 after the US election.

On the other hand, according to the regression analysis of Bank of Italy in 2024, once Trump wins in 2024, it is more likely to be accompanied by bond market volatility, stock price rise, volatility reduction and oil price decline.

In addition to presidential elections, the control of the House of Representatives and Senate is also closely monitored. According to current polls, the Republican Party seems to have a chance of winning the Senate, while the Democratic Party is expected to win the House of Representatives, which could trigger a political deadlock and make the implementation of policy agendas more difficult. But interestingly, analysis by asset management firm Darrow Wealth Management found that political deadlock when the President, Senate, and House of Representatives are controlled by different political parties is the best outcome for the market, as the market prefers an environment with less policy change.

Overall, it is difficult to determine where the election results will push the cryptocurrency market in the short term, but what is certain is that next week, under the dual events of the US presidential election and the Federal Reserve interest rate decision, the cryptocurrency market is bound to experience significant volatility, and investors should reduce their holdings appropriately to avoid taking on too much risk.

Binance Documentary Analysis

GTRadar – BULL

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GTRadar - Potential Public Chain OKX

The returns of 'GTRadar BULL', 'GTRadar Balance', and 'GTRadar Potential Chain OKX' in the past 7 days were+4.02%, -3.07%, and -0.85%, respectively, and the returns in the past 30 days were+4.36%, -6.74%, and -1.32%, respectively. At present, GTRadar BULL holds a net long position of 80%, mainly in BTC and ETH. At present, 'GTRadar - Balanced' holds a net long position of about 50%, mainly in SOL and ETH. At present, GTRadar - Potential Public Chain holds a net long position of about 40%, mainly in SOL and ETH. The long-term returns of a follower who frequently changes their investment portfolio are not as good as those who continue to follow a group of followers. Do not easily end a follower just because of a short-term pullback. From the curve chart, a pullback is actually a good time to start a follower, and going in and out can significantly reduce the yield.

Focus News

Tesla Q3 Financial Report: Net Revenue Increased, Unsold Bitcoin

According to Tesla's third quarter financial report released on October 23, the company did not sell any digital asset investments worth $184 million in the current quarter and has not sold any cryptocurrency holdings for five consecutive fiscal quarters.

The number of Bitcoin whales has risen to the highest level since January 2021

According to data tracked by Glassnode, a blockchain data analysis firm, and Andr é Dragosch, head of European research at Bitwise, a cryptocurrency asset management company, the number of Bitcoin whales (wallet addresses holding at least 1000 BTC) jumped to 1678 at the beginning of this week, reaching the highest level since January 2021.

US government wallet address hacked with 20 million magnesium encrypted assets

The US government's wallet experienced a movement on the 24th, with a total value of approximately $20 million worth of cryptocurrency being transferred to external addresses. These funds are related to the Bitfinex hacking incident and come from 9 different US government seized addresses. These tokens include AUSDC stablecoins worth nearly $14 million, USDC worth $5.4 million, USDT worth $1.1 million, and ETH worth nearly $500000. However, the attacker returned most of the funds for unknown reasons afterwards.

Microsoft considers investing in Bitcoin, board recommends opposition

According to documents submitted to the US Securities and Exchange Commission (SEC) on Thursday, tech giant Microsoft appears to be considering investing in Bitcoin. The company has included this issue as a "voting item" on the agenda of the next shareholders' meeting scheduled for December 10th, with a proposal titled "Evaluation of Bitcoin Investment".

Kraken launches two-layer network Ink based on Optimism super chain

Cryptocurrency exchange Kraken announced on the 24th that it will launch the Ethereum second layer network Ink built on top of Optimism's Superchain. This memory blockchain will focus on creating the best decentralized finance (DeFi) experience, providing users with seamless access and interoperability.

The Financial Supervisory Commission confirms that the "VASP Registration Measures" will be implemented one month ahead of schedule

Yesterday, the Chairman of the Financial Supervisory Commission, Peng Jinlong, confirmed during the inquiry of the Finance Committee that the implementation schedule of the VASP registration method will be advanced by one month from the originally scheduled January 2025 to December 2024. Legislator Ge Rujun questioned whether changing the implementation schedule of regulations under the pressure of the Executive Yuan by the executive branch would cause enormous pressure on businesses, and such hasty implementation may also lead to defects in the registration application process.

FTX and Bybit exchange reach a settlement agreement of 228 million magnesium, and the day of claims is just around the corner?

The bankruptcy estate administrator of FTX has reached a settlement agreement of $228 million with Bybit exchange. According to legal documents dated October 24th, this settlement stems from a lawsuit filed by the FTX estate administrator in 2023, aimed at recovering funds to repay past customers and creditors.

Tether CEO refutes Wall Street Journal allegations and reveals USDT reserve assets

Tether CEO Paolo Ardoino recently publicly introduced the reserve asset portfolio supporting the company's Tether USD stablecoin (USDT) and responded to reports from The Wall Street Journal that Tether is under investigation by the US Department of Justice and Treasury. Ardoino strongly denies these allegations and accuses the report of being "just a rehash of old news".

Vitalik proposes methods to reduce Ethereum protocol bloat in the 'Purge' upgrade roadmap

Ethereum co-founder Vitalik Buterin outlined a possible "Purge" upgrade roadmap in his latest article, aimed at gradually addressing the complexity and "inflation" issues of Layer 1.

Coinbase analysis of Solana network costs: activity tends to be in the western US time slot, and DEX fees account for a higher proportion than Ethereum

According to the latest research report released by Coinbase Institutional, the activity of the Solana (SOL) network typically peaks during US time periods, but compared to Bitcoin and Ethereum, Solana's activity seems to be more biased towards time zones on the West Coast of the United States. The report points out that Solana's transaction fee expenditure is consistent with other low-cost networks, with the top 0.13% of users contributing 90% of non voting transaction fees, most of which come from DEX trading activities.

Ethena Accused of 'Black Box': Stealing Mining with Locked Tokens, Ignoring Doubts

Recently, netizen Nomad revealed on social media that the Ethena team, a decentralized financial protocol, used 180 million ENA tokens, equivalent to 25% of the SENA supply, in the SENA third quarter points airdrop event. This operation diluted the profits of other participants and raised serious concerns among holders about the team's ethics and transparency. However, the Ethena team later denied the allegations of using lock up tokens for mining.

Accused of affiliated company supplying TSMC chips to Huawei, Bitmain: The incident has no connection with the company

According to two informed sources cited by Reuters on the 26th, TSMC has suspended shipments to Chinese chip developer Sophgo after discovering that Huawei's AI processors are using chips produced by TSMC. According to reports, Suaneng Technology is affiliated with Bitmain, a large mining machine manufacturer. However, in a statement released today, Bitmain stated that it focuses on the cryptocurrency mining machine business and has no connection to the supply investigation incident mentioned above.

Binance announces the launch of "Binance Wealth" for high net worth clients, attracting traditional financial institutions to settle in

According to the official announcement, Binance Exchange has launched a solution called "Binance Wealth" specifically designed for high net worth clients. This solution allows clients to manage their investments flexibly or allows wealth managers to recommend investment targets. It is reported that wealth management personnel will be responsible for the customer onboarding process and provide a user experience with traditional wealth management frameworks.

Bitcoin price approaches historical high, BlackRock IBIT fund turnover hits six-month high

Bitcoin (BTC) rose above the $73000 level on Wednesday morning Taiwan time, reaching $73600 at one point, with only about 0.3% remaining from the historical high set in March this year. Before the deadline, the price of Bitcoin has fallen back to $72300. As Bitcoin approaches historical highs, the US Bitcoin spot ETF has attracted approximately $3.6 billion in net capital inflows so far this month

The above content does not constitute any financial investment advice. All data is from the GT Radar official website announcement. Each user may have slight differences due to different entry and exit prices, and past performance does not represent future performance!