There are three main reasons why the current market cannot maintain its upward trend:
1: Macroeconomic forces put downward pressure on Bitcoin prices
On October 2, Michael Barr, the Fed's vice chairman for supervision, announced in New York that he expects economic growth to slow to "below potential" as rising interest rates will limit economic activity. He also noted that the full impact of the current monetary policy has yet to be seen. According to the CME FedWatch tool, the market is currently optimistic about the possibility of the Fed raising interest rates again in 2023.
On October 3, the inflation-adjusted real yield on 10-year U.S. Treasury bonds hit 2.47%, the highest level in nearly 15 years, according to the U.S. Treasury Department. This development partly explains why the U.S. dollar index (DXY) reached its highest level in 10 months.
Additionally, Reuters reported that the United States has become a relatively more attractive investment destination due to its "economic resilience," with substantial growth compared to Europe and China.
2: Bitcoin trading data shows a decline in leveraged long position activity
Bitcoin monthly futures contracts typically trade at a slight premium to the spot market, suggesting that short sellers are demanding more money to delay settlement. As a result, BTC futures contracts typically trade at 5% to 10% annually, a situation known as contango that is not unique to the cryptocurrency market.
BTC futures premium is trading below the neutral threshold of 5%, remaining in the neutral to declining range. This indicates a lack of demand for leveraged long positions.
Additionally, spot trading activity on traditional exchanges has fallen to its lowest level since the end of 2020, indicating a decline in participation from institutional investors.
3: Investors’ expectations for spot BTC ETFs decline
One of the factors supporting Bitcoin’s 68% surge by 2023 is the prediction that the U.S. Securities and Exchange Commission will approve a Bitcoin spot ETF. However, despite multiple delays from the regulator, the most recent Ethereum futures-based ETF, which went live on Oct. 2, has shown lackluster demand.
Furthermore, despite a favorable court ruling to convert the Grayscale Bitcoin Trust into a Bitcoin spot ETF, it is still trading at a 19% discount to the Bitcoin it holds. This data suggests a lack of confidence in the approval of a Bitcoin spot ETF, as investors have the option to redeem their shares at par after conversion.
Ultimately, Bitcoin was unable to overcome the $28,500 resistance level, with Federal Reserve representatives warning of impending economic stress. Therefore, the prospects of overcoming this resistance in the short term do not look very optimistic.
Recent market outlook:
The external market has been very bad in the past few days. The rise in US bond yields has directly led to a drop in Hong Kong stocks, Nikkei index, European stocks and US stocks, and the crypto market has basically consolidated at this position. October is actually a relatively friendly month, but the US economy has recovered very well, which has given the Federal Reserve the capital to scare the capital market. It may be dragged down in the short term, but I still tend to be bullish overall from October to December. But after this period of bullish market ends, there will definitely be a wave of deep adjustments waiting for everyone.
I see many people shouting that the bull market is just beginning at this position, which is really nonsense. There is no threshold in this industry, and all kinds of people can come to express their opinions, so some opinions will appear frequently even if they are incredibly wrong, and everyone just needs to get used to it. What I want to say is that this wave is at most a rebound with a probability of more than 60%, and the bull market will definitely not begin at this position.
ETH：
Since the implementation of EIP-1559 in early August 2021, Ethereum has destroyed a total of about 3.62 million ETH, worth about $10.24 billion. Many people don't know what this means. Although the market value of ETH is at the level of hundreds of billions of US dollars, the buying of tens of billions of US dollars can make Ethereum pull up at least 50 points (because of the position). This wave of ETH has deflation, applications, ETFs, interest rate cuts, and big cake cycles. You can imagine how much it will rise. This is what I have been saying for the past two days. Ethereum will be the leader of the next big market!
Institutions predict that the price of Bitcoin will reach 1 million US dollars in 2026?
I think this prediction is too optimistic, but it is still possible to reach 70,000 US dollars (the previous high) in 2024. In short, we are now on the eve of dawn, so just hold on. Don't be reckless at this time, and don't believe some people's bullish remarks. Wait patiently for the bottom to come. If you go all in at this time, the cost will be much higher.
The market conditions in the past few days seem to have trained you into a habit, making you feel that there may be a big drop in the future, so you must run away when you make some profit, otherwise you will lose all your money and interest the next day.
As a result, the bull market really started, and the wave of rise did not look back, leaving a large number of people empty-handed, and the empty positions piled up like a mountain.
Therefore, smart people will hold on to the big and second cakes in their hands, and take some good copies of the rest, and hold small positions for short-term trading. It doesn’t matter if they sell them immediately, because they can make up for the big and second cakes anyway.
It’s okay to be trapped in a good copycat in the short term. Just hedge a little when it goes up, lock in profits, control the floating loss, and then look for some certain arbitrage opportunities. While enjoying a little, wait for the big bull, and then increase your efforts.
Counterattack is so simple!
Let those ignorant idiots play the market, chase the ups and downs, bet on hundred-fold coins, wait for a big drop within 15,000, and bet on contracts.
Anyway, we should be cautious and just do what has a high probability of happening.#BTC #ETH
