The sudden change in monetary policy between China and the United States has made BTC ready to break through amid the chaos

The information, opinions and judgments on markets, projects, currencies, etc. mentioned in this report are for reference only and do not constitute any investment advice.

BTC is expected to end the longest high-level shock period in history. Patience is the best strategy to welcome the second half of the bull market.

Market Week

This week, BTC opened at $62,811. As of the morning of October 14, it hovered around $62,500, recording a weekly cross with an amplitude of nearly 9%. On Monday afternoon, BTC quickly rose to around $64,500, and then broke through the $66,000 mark in the evening.

If we ignore the rapid market on Monday, BTC has generally continued its relatively weak trend since October in the past week. This is consistent with the net outflow of funds in the crypto asset world in October. During the same period, the monetary policies of the two superpowers, China and the United States, have undergone tremendous changes, which has also impacted BTC to a certain extent.

On September 23, China released perhaps the strongest rescue policy ever for the stock market and real estate industry. The market tends to believe that this is related to the first 50-point interest rate cut in the United States the week before. In the two weeks after China's rescue policy, the United States successively released strong employment data and relatively neutral inflation data. The combination of the two quickly changed the market's expectation of the Fed's continued 50-point interest rate cut to 25 points. Some institutions even believe that the possibility of not cutting interest rates is not ruled out. This has cast a shadow on Bitcoin, which is negatively correlated with the US dollar.

BTC's recent bull run is highly correlated with U.S. stocks, especially Nasdaq. In addition, spot ETFs are directly related to the two, and the recent market trends are also highly correlated with the inflow and outflow of ETF funds.

A recent article by BlackRock pointed out that the market tends to compare BTC with US technology companies, but this clearly misunderstands the special asset attributes of BTC. In the medium and long term, the situation of being "engulfed" by US stocks will inevitably be solved.

Turning our attention back to the world of crypto assets, after seven months of high-level shock adjustments, BTC has established solid support in the current range, and the chips have been fully washed out. Once the second half starts, it will develop rapidly.

Federal Reserve and economic data

On October 10, the U.S. announced that the annual CPI rate was 2.4%, slightly higher than the expected 2.3%. On October 14, the U.S. announced that the number of new jobs in September was 254,000, higher than the expected 147,000. The employment data for July and August were significantly revised upwards.

The continued expansion of the conflict in the Middle East has also increased the risk of a rebound in inflation. As Fed officials continue to be hawkish, market participants have eventually lowered the extent of this year's interest rate cuts. Currently, the highest probability of FedWatch is two rate cuts, each of 25 basis points.

With the decline in the rate cuts within the year, the US dollar index rebounded strongly and rose to 102.89. At present, all parties in the market are gradually pushing the stock index to rise slowly under the expectation of a "soft landing". The Nasdaq is approaching its previous high, and the Dow Jones and S&P 500 have both hit record highs. After the adjustment, gold stabilized and rebounded, with London gold rising 0.17% this week. Treasury bonds were sold off again, with the 2-year yield rising to 3.953 and the 10-year yield rising to 4.073.

Stablecoins and ETFs

This week, funds were outflowing as a whole, with a loss of 330 million US dollars, mainly due to the withdrawal of funds from the USDC channel. Specifically, USDT inflow was 65 million, and USDC outflow was 750 million, resulting in a large outflow of 687 million from the stablecoin channel. The ETF channel contributed to the positive inflow of funds: two trading days out of five trading days recorded a large inflow, with a net inflow of 357 million for the whole week.

The large outflow of funds on the exchange was the main reason why BTC broke through $60,000 again this week. However, with the support of the rise of the Nasdaq, the purchase of funds from the ETF channel enabled BTC to recover to the $63,000 level after falling below $60,000. The rapid breakthrough on Monday was also directly related to the inflow of $470 million from the ETF on the 14th.

Supply Analysis

After a brief "from short to long" last week, the "from long to short" reappeared this week. Our previous analysis pointed out that the second dispersion of chips after long hands re-accumulated chips is one of the main signs of the start of the second half of the bull market.

The cost line for short-term investors is currently around $62,500, and the maximum chip accumulation price is $61,800. The amount of BTC accumulated on exchanges remains low, within 3 million.

BTC on-chain data

There are few changes in the number of new addresses, an increase in transactions, an increase in active entities and transfer values, and the mid-term has entered an expansion period. Bitcoin mining computing power is running near a record high.

Ecological analysis

The number of active addresses and newly added address centers in the Ethereum ecosystem has entered a period of expansion, and Transacions has hit a record high, driven by Layer2 Base.

Solana's new addresses and transactions remain high, the 30-day average hits a new record high, and active addresses remain at a historical high.

Cycle Indicators

The EMC BTC Cycle Metrics indicator is 0.25 , and the bullish signal needs to be further activated.