Under the background of the current cryptocurrency market recovery, the overall market trend shows strong signs of recovery. The sharp increase in the issuance of stablecoins has significantly improved market liquidity, and the price of Bitcoin has exceeded $65,000, which has made many institutions optimistic about the future trend. Currently, the number of institutions that are bullish far exceeds the number of institutions that are bearish, reflecting market participants’ optimistic attitude towards crypto assets. This article summarizes institutional views on the market recovery since July 25th (the past two months).
Bullish: Mainstream views from institutions, mainly based on macro signals
Arthur Hayes: Global monetary easing trends will drive the rise of the crypto market
Arthur Hayes, co-founder of BitMEX, analyzed the trend of interest rate cuts by the Federal Reserve and its impact on the economy. He believes that the Federal Reserve usually continues to cut interest rates until the rate approaches 0% when facing high volatility. Interest rate cuts will promote credit growth in banks, and governments will continue to borrow to gain public support. The European Central Bank will also lower interest rates to cope with economic downturn, and governments will encourage banks to provide more loans to local companies to create jobs and rebuild infrastructure.
With the Federal Reserve’s interest rate cuts, the US dollar may weaken, allowing China to increase credit while stabilizing the exchange rate of the renminbi. The People’s Bank of China has already started cutting interest rates, indicating a relaxation of monetary policy. Other major economies are also lowering interest rates, relieving pressure on the Bank of Japan to raise interest rates. Global economies are responding to volatility by reducing currency prices and increasing money supply. Hayes suggests that investors holding cryptocurrencies should remain calm and expect an increase in the value of their fiat currencies.
10x Research: Strongly bullish, expects Bitcoin to reach $70,000 in the next two weeks and hit a new high by the end of October
10X Research pointed out in its latest report that the sharp increase in the issuance of stablecoins is expected to increase liquidity by nearly $10 billion in the coming weeks, which far exceeds the liquidity of Bitcoin ETF. Recently, the inflow of Circle’s stablecoin USDC reached 40%, indicating an increase in allocation by large market participants, which may be related to the recovery of DeFi activities. So far this year, the total inflow of stablecoins has reached $35 billion, resulting in a total circulating value of stablecoins of $160 billion.
The report also mentioned that after the FOMC meeting in July, US bond yields fell sharply, and the 10-year Treasury yield fell below 4.0%, triggering a recovery in DeFi activities. Aave’s lending platform monthly fee soared to $43 million in August, although activity and fees slowed down in September, activity and fees may rebound after the Federal Reserve’s interest rate cuts.
With Bitcoin breaking through $65,000, 10X Research expects it to quickly rise to $70,000 and may hit a historical high in the short term. Founder Markus Thielen stated that the surge in stablecoin minting has injected liquidity into the market, and the possibility of a strong rally in the fourth quarter is high, implying that the crypto field may soon see more FOMO.
CryptoQuant: Funding rates indicate strengthened bullish sentiment among futures traders
Julio Moreno, Head of Research at CryptoQuant, stated that the 30-day moving average of funding rates has shown a positive change, indicating strengthened bullish sentiment among futures traders. Moreno pointed out that this upward trend occurred after a long period of decline, indicating that market participants may have turned more optimistic. Coinglass data shows that since the Fed’s interest rate cut on September 18th, Ethereum’s open interest-weighted funding rate has been trending positively and is currently at 0.0089%.
At the same time, increased demand in the US market has pushed Bitcoin up to $65,000, and Bitcoin’s premium on the Coinbase platform has reached its highest level in two weeks.
MN Trading: Despite a loss of more than 50%, still optimistic about altcoins, ETF fund inflow trend will continue, Asia may provide momentum for a bull market
Michaël van de Poppe, founder of MN Trading, stated, “There is a significant inflow of funds into Ethereum and Bitcoin ETFs. I believe this trend will continue, and these two blue-chip stocks are the best bets against potential US dollar failure. At the same time, China is driving the market forward. Perhaps Asia will provide momentum for a bull market.”
He also mentioned, “People have been mocking my actions in the altcoin portfolio, yes, I have fallen by more than 50%. However, if my basic theory is correct, I can accept a drop of more than 50%. If this happens within 12-18 months, my portfolio will have at least a 10x return. In the final round, the third cycle, before making safer bets and having a larger AUM, the investment return rate will naturally be lower. Better times are still ahead.”
Matrixport: Bitcoin price may see a significant rebound in early October
Matrixport released a report stating that Bitcoin is likely to rebound towards the end of the year, bringing surprises to many market participants. Although Bitcoin has been consolidating since reaching a new all-time high in March 2024, the return rate from the beginning of the year has also reached +49%, which is on par with the predicted return rate of +47% based on historical data. Based on the performance of Bitcoin in the past decade, there may be a significant price rebound in early October, which is an exciting period for participants in the crypto asset field. At the same time, a slight rebound in Ethereum gas fees suggests that the summer consolidation phase may be ending. Further analysis of Ethereum’s revenue and gas fee trends is needed to judge the sustainability of the rebound and understand the changes in market activity.
A chart released by Matrixport shows that after the recent Fed interest rate meeting, Ethereum gas fees have risen, indicating a significant increase in network activity, which may indicate important changes in the crypto market. Despite negative news, the price of ETH has rebounded. Currently, the crypto market may be experiencing a high beta coefficient and high volatility rally, and the existing trend indicates that this momentum may continue into the fourth quarter.
Another chart states that although Bitcoin naturally has strong volatility, its funding rate has returned to almost zero, indicating that long positions in the futures market are not heavily weighted even in the recent Bitcoin rebound. This provides an opportunity for traders to increase long positions and may further push up prices. However, the low funding rate also indicates that the recent rise may be driven by spot buying, which is often more strategic and long-term rather than speculative futures trading. Overall, this is a positive signal indicating that the market is not overly leveraged and still has upward potential in the future.
QCP Capital: Loose monetary policies of central banks around the world will drive the rise of crypto prices
QCP Capital stated in a post that in the absence of macro catalysts from the United States, BTC has been fluctuating between $62,000 and $64,000. Key macro events to watch today include US GDP data and a speech by Federal Reserve Chairman Powell. The market will closely watch Powell’s speech to see if there are any changes in sentiment after last Thursday’s FOMC press conference, which may hint at further easing. Last night, US presidential candidate Kamala Harris reiterated her support for cryptocurrencies, marking the second time this week she promised to make the US a dominant force in “artificial intelligence, quantum computing, and blockchain.” She also reiterated the inclusion of “digital assets” in her economic plan. With both US presidential candidates promising support for cryptocurrencies, it is a victory for the US crypto ecosystem regardless of who wins. With central banks around the world entering a loose monetary cycle, it is expected that the influx of liquidity will drive up crypto prices.
At the same time, in comparison, Bitcoin’s September increase exceeded 7%, making it one of the strongest September performances in history, while the S&P 500 index rose 5.1% in the third quarter, its best performance for the same period since 1997. Global risk appetite is strong, and the Shanghai Composite Index rose 9% in a single day after China launched a large-scale real estate support plan. QCP expects Bitcoin to benefit from a possible stock market correction in the context of global monetary easing. QCP maintains a bullish view on Bitcoin in the medium term and believes that breaking $70,000 may trigger further upward momentum.
Bearish: Macro data and social media data do not necessarily mean a bull market
BitMEX Chief Growth Officer: Market is in a rebound phase, but RRR indicator suggests potential bearishness for cryptocurrencies
Raphael Polansky, Chief Growth Officer of BitMEX, stated that although many people are cheering for the market rebound, one of BitMEX’s favorite macro indicators, RRP, shows signs of continued tightening liquidity this month. RRP has historically shown an inverse correlation with Bitcoin’s performance. High RRP is usually bearish for Bitcoin and cryptocurrencies.
Santiment: Based on social media data, BTC will not hit a new high anytime soon
Santiment stated that if investors are waiting to see Bitcoin hit a new all-time high, they may need to lower their expectations. Currently, the ratio of bearish posts to bullish posts on social media is 1:1.8. Historically, the market has always gone against people’s expectations.
Neutral: BTC has only found a support level
CryptoQuant: Short-term holders’ average buy-in price for BTC is $63,000, expected to be the current support level
CryptoQuant.com recently released a market outlook analysis stating that BTC has risen more than 23% in the past three weeks, from $52,500 to over $65,000. Part of the reason for this strong momentum is the increased demand for Bitcoin spot ETFs. Therefore, short-term holders are back in a profitable position. Short-term holders are investors who have transferred Bitcoin within the past 155 days, with an average purchase price of $63,000, which is expected to provide support. In addition, the futures market shows signs of overheating, with open interest contracts amounting to $19.1 billion. Since March 2024, this indicator has exceeded $18 billion six times, each time leading to a price drop, and this is the seventh occurrence. At the same time, Bitcoin spot ETF holdings are being converted into long-term holder supply. Although this looks bullish, such a shift usually occurs in the late stage of a bull market.
Bitfinex: BTC expected to experience range-bound volatility in the short term
Bitfinex analysts stated that even if spot buyer demand weakens, ETF fund inflows can support the BTC price. Continued ETF inflows may boost the BTC price, but as spot trading volume tends to flatten out as the price reaches $63,500, BTC is expected to experience range-bound volatility in the short term.
Renowned trader Eugene: Reducing some positions and strictly following the trading plan
Renowned trader Eugene Ng Ah Sio posted on social media that he has reduced some positions and sold some assets, despite the huge FOMO everywhere, he is still trying to stick to the plan. Previously, he expressed his views on the bull market on September 25th, stating, “I won’t blindly desire more profits as the price rises. For me, the $65,000 to $68,000 range is a reasonable profit-taking zone for early Bitcoin buyers. Many hesitant funds will enter at $65,000, which may also mean that this is the last upward momentum. I don’t think it will break $70,000 before the US election, so I won’t choose to increase positions here. If it touches $68,000, I would rather choose to liquidate and re-enter at the $60,000 zone during the drop.”
