On November 7, 2023, the tokens The Graph (GRT) and Trust Wallet (TWT) officially launched on HotsCoin. Recharge and trading functions are now open. In addition, today's HotsCoin's list of top gainers, as of 17:30 (UTC+8), includes ORDI, up 36.54%; BLUR, up 23.69%; and YGG, up 8.83%.
With the start of the Federal Reserve's pause on interest rate hikes, the macro U.S. stock market experienced a minor rebound. However, signs of subsequent lack of follow-through and horizontal trading have become apparent. Conversely, the cryptocurrency market has been relatively strong lately. After stabilizing above $34,000, Bitcoin has made multiple attempts to stabilize above $35,000. It may be the market testing sentiment or it may be a profit-taking and unwinding zone above $35,000. As a result, the candlestick chart has crossed $35,000 more than 20 times in the past week without being able to effectively stabilize for 24 hours. Thus, $35,000 has become an important focal point for sentiment and long-short positioning battles. Market participants are almost evenly divided in their outlook, and the market is eagerly awaiting a new round of news, with the next important news expected on November 11 (this Saturday). The most likely outcome? In personal expectation: a 10% probability of approval, a 30% probability of rejection, and a 60% probability of delay. The reasons for this are various departments' coordination, the need to rework laws and regulations (which are entirely different from futures), and other factors like the transition of leadership, making the approval of spot ETFs difficult in the short term. Despite the pressure exerted by politicians in recent times, it is evident that the current SEC chairman and members still do not fully appreciate the cryptocurrency market. This is a major reason for the continued delay in the approval of spot ETFs. Now, let's take a look at the dynamics of on-chain data and changes in investor sentiment.
First, let's take a look at the net flow of tokens on exchanges. Since Bitcoin's price stabilized above $31,000 after rising from $26,000, it has mainly seen net inflows. This indicates that the market is gradually digesting the selling pressure from profit-taking. With ongoing digestion, the current net flow has started to balance. As long as Bitcoin can stay above $34,000 and digest profit-taking, it should be possible to maintain this trend in the short term. The subsequent trend will depend on news developments. Based on the data, the market appears relatively strong.
Next, let's look at open interest data. In the early stages of a slight increase in Bitcoin's price, open interest data did not increase; in fact, it decreased. Many users were liquidated due to market manipulation and sharp price movements, which had a significant impact on sentiment. However, as Bitcoin's price continued to rise, open interest data started to rise significantly and has already returned to levels near $100 billion before the drop in August. The degree of speculation in the market has increased significantly, and investor confidence in the outcome of the $35,000 battle and the future is generally optimistic. Regardless of sentiment, how can exchanges and market makers maximize their profits? (1) Through continued substantial increases in spot ETFs, (2) by capitalizing on the emotions of a volatile market and short-term market sentiment shifts (fluctuations between $31,000 and $34,000). The long-short battle is almost evenly matched, and to maximize profits, you must be vigilant about the possibility of a subsequent decline in the market. Make sure to set stop-loss orders. Because there is the potential for significant price fluctuations, don't stubbornly hold your positions or use high-leverage contracts, as it will lead to significant discomfort. We recommend maintaining a 40% spot position and waiting for news developments. Place your stop-loss at $30,800. If the news is delayed or rejected this time, there is a high probability of a pullback. It is more likely to see approval after the first quarter of 2024.
In conclusion, based on on-chain data and market sentiment, the market still appears to be bullish. Bitcoin's price, which has been oscillating between $34,000 and $35,000, has gradually started to narrow the range and is approaching $35,000. If sentiment weakens and market participants are more concerned about the rejection of spot ETFs, then the range may move closer to $34,000. Of course, such judgments are overly subjective. Just like when Bitcoin has risen a lot, many people tend to believe that it will fall. Or when there is positive news ahead, people still believe that the price will rise further, even though it has already increased significantly. These are all irrational judgments. We should assess the current market environment and the impact of this news objectively. In simple terms, it's about how many people are willing to buy it. Cryptocurrency is an area that Fidelity and BlackRock are entering. They have applied for spot ETFs because the trillion-dollar market is attractive, with even greater potential in the future. This is the main reason why most investors and even institutions are willing to enter. However, since the good news has not landed yet, and there is a higher probability of delay, we need to be more vigilant as we approach the timing of the game. News has a significant impact, and market volatility will be substantial. So, avoid holding positions or using high-leverage contracts; otherwise, you may be in for a tough time. We recommend maintaining a 40% spot position and setting a stop-loss at $30,800. If the news is delayed or rejected, there is a high probability of a decline, likely after the first quarter of 2024.
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