Matrixport Market Observation: BTC Attempts to Break Through $70,000 Resistance, Uncertainty of U.S. Election Affects Multiple Markets
As the U.S. election approaches, the Trump effect is gradually becoming apparent and the market is positioning itself in advance. If BTC successfully breaks through the resistance level, it is expected to challenge new highs.In the past week, BTC finally broke through the previous resistance level, entering the range of $67,000 - $69,000, and on the 21st, it surpassed $69,000, reaching a high of $69,519. Although it faced resistance and fell to $66,571, with the market buying on dips, BTC returned above $67,000. As of the publication of this content, the BTC price is fluctuating around $67,185 (the above data is sourced from Binance spot, October 22, 15:00).
Currently, the resistance level near $70,000 for BTC is quite strong, and the price is relatively mild in the short term. However, with the U.S. elections approaching, the Trump effect gradually becoming apparent, and the market positioning in advance, if BTC successfully breaks through the resistance level, it is expected to challenge new highs.
Market Analysis
Multiple Federal Reserve officials speak out, adjusting market expectations for future rate cuts
On October 21, Eastern Time, several Federal Reserve officials spoke, adjusting market expectations for rate cuts. The three major U.S. indices reacted differently; the Dow Jones fell significantly, while the Nasdaq turned positive. Dallas Fed President Logan stated that the economy is strong and stable, but uncertainty still exists. If the economy meets expectations, a "gradual" rate cut is anticipated. Minneapolis Fed President Kashkari indicated that the high inflation issue in the U.S. is not caused by the labor market, and the pace of rate cuts is expected to slow in the coming quarters. Kansas City Fed President George directly stated that in the face of uncertainty, she hopes to slow the pace of rate cuts.
Spot and futures gold both hit historical highs during trading, with clear market risk aversion
On October 2, Eastern Time, COMEX December gold futures rose to $2,755.40 during trading, hitting a historical high; spot gold CFD also rose to $2,740.44, marking a historical high. Although both fell back at the end of the trading session, gold prices have risen over 30% this year, and the market generally believes that gold prices will continue to rise.
The continuous rise in gold prices is attributed not only to the uncertainty surrounding the U.S. elections and the ongoing situation in the Middle East, which has led to increased market demand for safe-haven assets, but also to significant purchases by central banks and U.S. rate cuts, which are important driving factors.
BTC futures nominal open interest hits a new high, with continued increase in BTC market participation
According to Coinglass data, the nominal open interest of Bitcoin futures denominated in U.S. dollars tracked by major exchanges broke through $40.63 billion over the weekend, setting a new historical high. The open interest stands at 592,000 BTC, the highest level since December 2022. At the same time, market inflows into BTC ETFs continue to increase. For example, BlackRock's IBIT ETF attracted over $1.1 billion in funds last week, marking the strongest performance since March of this year.
Suggested Positioning
Although BTC and ETH are now close to the key resistance levels of $70,000 and $2,800, respectively, based on the recent lack of major catalysts, this week's market should primarily see mild fluctuations. If ETH rebounds strongly again this week and successfully breaks through $2,800, it could bring new attention to the crypto market and boost the market.
At the same time, based on the rising ten-year U.S. Treasury yields and the prices of safe-haven assets (gold, silver), the market is adjusting the average returns of U.S. stocks over the next decade, with the U.S. stock market gradually trending towards a bull market independent of the overall market. Against the backdrop of uncertainty surrounding the U.S. elections and localized geopolitical fluctuations, the probability of black swan events increases. It is advisable to cautiously assess risks and position in the market. Although Trump's odds have risen significantly, current polling data remains relatively tight, and investors positioning for the Trump effect should maintain a cautious attitude.
In the current market conditions, using capital-protected structured products to ensure capital preservation and interest income is a good choice for obtaining currency-based appreciation. Shark Fin or Trend Smart Yield products, based on cost protection, can provide relatively good additional returns if the market trend is correctly judged, making them suitable for investors who are optimistic about BTC and ETH trends in the long term.
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Disclaimer: The above content does not constitute investment advice, sales offers, or purchase offers to residents of the Hong Kong Special Administrative Region, the United States, Singapore, or other countries or regions where such offers or invitations may be prohibited by law. Digital asset trading may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided herein.
