Will the cryptocurrency market see new changes in the fourth quarter of 2024? 4 macro factors to pay attention to

A few days ago, a friend left a message complaining: now I only have altcoins in hand, and with the current market situation, I feel reluctant to sell, but if I don't sell, it seems inevitable that I will lose everything.

Yesterday, another friend said: my Ethereum contract expires on the 27th, and I have already lost 21 in the contract; whether I break even or not, it's still a loss. The only hope now is to lose less.

It can be seen that many people's moods do not seem to be very good right now.

However, there are also those with a better mindset. For example, some big shots in the group often share jokes from time to time. A few days ago, a friend in the group said about me: "Da Long studies fiercely, but ends up with a full position in Bitcoin."

To be precise, I don't have all my assets in Bitcoin; in this cycle, I have only invested 80% of my position in Bitcoin.

As for the "studying fiercely" part: it's not really research; it's just maintaining a learning mindset and sticking to a state of learning. This aspect is more about personal interest, mainly to find some materials or points of thought for continuous output of content. However, I rarely write articles just to catch new trends; the main principle is that I write casually, and everyone reads casually.

Regarding the "full position in Bitcoin" part: this is related to investment strategy. In previous articles, I have shared my investment mantra (stability, accumulation, and moderation).

In simple terms, writing articles (self-media) and accumulating coins (investment) are two different things that do not conflict with each other. Moreover, currently, my personal time and energy can only be devoted to these two things. Different people have different risk preferences and investment goals; choosing what suits you is actually the best.

In an article a few days ago (September 4) about market trends, we mentioned: if Bitcoin can break through $73,000 in the near future (for example, by the end of the year or next year), it may reignite people's interest and hope in this market, and we might see new opportunities and welcome a brief bull market. The market is often a reflection of emotions because human nature is like this; trends often arise in despair, explode in divergence, and end in madness.

At this stage, the market's divergence still seems quite large. Moreover, many analysts believe that the Fed's interest rate cut this month is a done deal. From the current situation, the market should have already strengthened the expectation of a 25bps cut. What we are most concerned (worried) about now is whether the market has already priced in the expectation of a 50bps cut.

As for how much change the market will undergo in the short term? We need to wait for the FOMC meeting in the U.S. in a couple of days (September 18). The short-term fluctuations in the market may still be quite large, so it's advisable to watch more and act less. With the FOMC meeting proceeding, one possible scenario for the market this week (just a guess) is that we might see Bitcoin's price rise back to around $61,000, then drop again, continuing to oscillate within a range.

The market's trend has some randomness; although on the surface, we cannot make accurate predictions, we can still try to think about some possible performances of the market in the last quarter of this year based on some fundamental news and data.

For example, from the historical return performance, the fourth quarter has been the best-performing quarter for BTC so far, with an average return of 88.84%. Moreover, during the last two halving periods, BTC rose by 58.17% (2016) and 168.02% (2020). As shown in the figure below.

Of course, historical data is only one aspect and can only serve as a reference; it cannot be directly used to predict the future because different periods will have different situations. We need to consider comprehensively. For example, in addition to the fundamental and news factors affecting the crypto market itself (which have been outlined in previous articles, so we won't elaborate here), we also need to consider the current macroeconomic situation.

Next, let's take a brief look at what macro aspects need to be focused on:

First, we need to pay attention to the U.S. presidential election.

Many analysts seem to associate Trump with cryptocurrencies, so this year's U.S. election is considered one of the important factors that will determine the direction of the crypto market. The general view is that if Trump wins the U.S. election in November, it will be seen as favorable for the crypto market.

However, from the current odds, it seems difficult to say who will ultimately win, with a probability of 50/50, as shown in the figure below.

Secondly, we need to focus on the Fed's interest rate cut.

From the data released by the U.S., it seems that inflation is cooling down, with the latest CPI reading showing the lowest level since February 2021, as shown in the figure below. This means that an interest rate cut may come soon. As mentioned above, we may have results in the coming days.

However, regarding the Fed's interest rate cut, there are currently two different voices in the market. Some analysts are bullish, while others generally believe that a rate cut is bearish. We won't provide specific conclusions here, but we can offer some basic views. As for whether it is bullish or bearish, you can make your own judgment: usually, the first rate cut is considered bearish only under the expectation of an economic recession. But if it is a non-recession period, the first rate cut can also be bullish.

Next, we need to pay attention to the U.S. dollar index.

The dollar index needs to be considered in conjunction with the interest rate cut issue because a Fed rate cut will lead to a weaker dollar index, which usually means it is favorable for stocks, gold, Bitcoin, and other risk assets. In other words, once the dollar weakens, it will make risk assets like Bitcoin more attractive to investors, potentially leading to a new round of price increases for Bitcoin. As shown in the figure below.

Finally, we need to pay attention to the overall global liquidity situation.

The essence of any financial market is liquidity, and Bitcoin is no exception. Some statistics show that historically, for every 10% increase in global liquidity, gold rises by 15%. Compared to gold, Bitcoin rises by about 90%. As shown in the figure below.

From the current Global Liquidity (M2) data, global liquidity is expected to continue to increase until 2025. As shown in the figure below.

In summary, regarding the overall trend of the crypto market, we still maintain the views expressed in previous articles: the market is expected to improve before the end of the year or next year (2025).

However, this improvement does not mean that Bitcoin's price will soar all the way; we may still face a continued oscillating market (even if it rises, it won't be smooth sailing).

This fourth quarter will be a very critical turning point not only for the crypto market but also for the global economic direction. Many people are still discussing whether to buy Bitcoin, while our only concern is: how many Bitcoins have we already accumulated.

As the saying goes, the market is unpredictable; anything can happen. Changes can occur slowly or very quickly. But regardless, from a long-term perspective, as long as we hold onto our assets and continue to stay optimistic and patient, we will be fine.

To conclude this article, let's end with a quote from Paul Orfalea (billionaire and founder of the famous U.S. printing chain Kinko's): "At 20, experience the world; at 30, figure out what you are good at; at 40, make money doing what you are best at, and aim to retire by 50. At 20, you care a lot about what people think; at 40, you no longer care about others' opinions; at 60, no one cares about you."