Daily News | US Middle East Policy May Pose A New Bull Market; The Stock of Ethereum CEX Dropped to Its Lowest Level in History; Arbitrum May Release A Major Announcement Tomorrow

Crypto Daily Digest: Arthur Hayes believes that US Middle East policy may lead to a new bull market; Arbitrum will release a major announcement

Arthur Hayes stated in his blog that the US policy choices in the Ukraine crisis and the Israeli-Palestinian conflict may further escalate tensions, leading to a massive increase in US military spending, which will then push up inflation expectations and treasury bond yields. In this environment, investors will reduce their holdings of US bonds and instead increase their holdings of gold and Bitcoin as safe haven assets. Hayes believes that this may lead to a new round of crypto bull market.

According to a report released by Galaxy Research, based on the total assets managed by the US wealth management industry, the growth rate of various channels entering Bitcoin spot ETFs in the industry is classified and estimated. The conclusion is that the inflow of funds into Bitcoin spot ETFs is expected to reach $14 billion in the first year, increase to $27 billion in the second year, and increase to $39 billion in the third year after launch.

The report also states that if the approval of Bitcoin spot ETFs is delayed or rejected, its analysis will change due to time and access restrictions. Alternatively, if the price performance is poor or any other factor causes the use or adoption of Bitcoin ETFs to be lower than expected, their estimates may be too aggressive.

On the other hand, Galaxy believes that its assumptions about access, exposure, and distribution are conservative, so capital inflows may also be higher than expected. The inflow of funds from ETFs, market narratives about the upcoming halving of Bitcoin, and the possibility of interest rates peaking in the short term all indicate that 2024 may be an important year for Bitcoin.

According to CoinDesk, SEC Chairman Gary Gensler declined to outline any plans for spot Bitcoin ETFs at the Securities Enforcement Forum held in Washington on Wednesday. He stated that he will “let it develop” and will not prejudge the situation until SEC staff make recommendations to the five member committee. Gensler objects when asked to provide any indication of the time or sequence that may be considered.

Gensler also declined to comment on other court cases filed by his organization against cryptocurrency companies. He said, “I will have every crypto transaction case argue for myself, and these arguments will be presented to jurists.”

Gary Gensler attended this event to give a speech on SEC law enforcement, which was filled with criticism of the crypto industry, reiterating that the industry is “riddled with non compliant behavior.” Gensler discussed that although cryptocurrencies are relatively large in scale, their share in the US capital market is less than 1%, so this topic has been overconsumed by the industry.

In terms of data, on October 25, according to the Cryptocurrency Fear and Greed Index, market sentiment has returned to its highest level since the BTC price reached $69,000 in mid November 2021. The index currently stands at 72 out of 100 points and is in the ‘greedy’ zone. The reason for the market’s strength is that BlackRock’s spot Bitcoin trading platform trading fund (ETF) may gradually obtain approval from the US Securities and Exchange Commission.

According to CoinGecko data, November 14, 2021 was the last time the index reached 72 points, just four days after BTC hit a historic high of $69,044 on November 10, 2021.

CryptoCon, a crypto analyst, stated in an article that according to the half cycle theory, BTC will reach its mid cycle peak ($47,000) in June 2024; The top of the next cycle will appear in December 2025, with prices expected to reach $90,000 to $130,000.

On October 25, the crypto options tool platform Greeks.live posted on social media that the current market sentiment is rapidly cooling, with BTC Dvol dropping from a peak of nearly 70% yesterday to the current 55%, and there is almost no cash premium. At present, from the perspective of futures and options holdings, there is insufficient upward momentum. The maximum pain points for the main terms of options are all below $31,000, while the monthly maximum pain point for the upcoming expiration is only $28,500.

On October 25, according to data from on-chain data aggregator Santiment, while ETH prices broke through the $1,850 level for the first time in nearly three months, Whale Address chose to transfer ETH out of the trading platform. The ETH supply held in the trading platform wallet has dropped to 8.41%, which is the lowest level since the creation of Ethereum in 2015. The whale address transaction volume extracted from the centralized trading platform for ETH has reached a peak of six months.

In addition, according to the Arbitrum Foundation’s Twitter post “Tomorrow,” it represents the emoji of the planet. The tweet has been placed at the top, indicating that a major announcement will be released tomorrow. Interested parties can stay tuned.

Today’s Main Token Trends

BTC

The high point for this week is still expected to be around $36,000, with a medium-term structural target between $37,755 and $40,505 as resistance levels. This is anticipated to occur by the end of this year or early Q1 next year and is likely to be a phase of the top.

After reaching this high point, a phase of retracement is expected, so entering at the current price is considered a chase entry. Short-term profits are possible, but there may be a risk of getting trapped in the medium term. If you wait for a second retracement, keep an eye on potential support levels at $33,000 and $30,800.

ETH

The high point for this week reached the $1,857 mark, which is a critical level for both bullish and bearish scenarios. The volume has broken a downtrend in place for seven months, but if it doesn’t stabilize around $1,815, a bearish trend may continue. Watch if $1,754 holds as support or if a short-term descending triangle pattern forms.

DOGE

The overall trend has been in a downtrend for nearly 900 days. From the mid-month entry point of $0.05925, there has been an 18.25% increase in price. There are signs of a potential peak in the short term. If the upward momentum continues, watch for $0.08861 and $0.10799 as potential targets, which may trigger a rise in the MEME sector.

Macro: Giant companies have poor financial reports, US stocks collectively closed lower, geopolitical factors will continue to impact central bank policies

The US dollar index surged above 106 and ended up 0.27% at 106.57. The US Treasury yield rebounded, with the 10-year US Treasury yield returning above 4.9% and ultimately closing at 4.961%. The two-year US Treasury yield fell first and then rose, ultimately closing at 5.125%.

Spot gold fluctuated upwards, but due to foreign media reports that Israel will delay its ground offensive, gold fell to an intraday low of $1,963.25 in the US market in the short term, but later rebounded and returned above $1,970, ultimately closing up 0.44% at $1,979.66/ounce; Spot silver closed 0.23% lower at $22.86 per ounce.

The three major US stock indices collectively closed lower, with the Dow Jones Industrial Average closing 0.32% lower and the Nasdaq closing 2.43% lower, marking the largest daily decline since February this year. The S&P 500 Index closed 1.43% lower. Nvidia closed down more than 4%, Google’s A-list closed down 9.5%, and Microsoft’s A-list closed up 3%.

The financial reports of giant technology stocks were poor, and technology stocks became the most severely sold stocks. Google’s parent company Alphabet fell nearly 10% after its previous financial report showed disappointing growth in its cloud business. The company’s market value has shrunk by over $166 billion, marking its largest daily decline in history. Amazon and Nvidia’s stock prices also fell, lagging behind the broader market, with financial technology company Affirm and payment company Block experiencing significant declines.

Overview of the situation between Palestine and Israel:

The conflict between Palestine and Israel has resulted in over 8000 deaths on both sides. The Wall Street Journal reported that Israel has agreed to postpone its ground attack on Gaza to facilitate the addition of US air defense s in the Middle East. The Prime Minister of Israel stated that he is actively preparing for a ground attack, and the timing will be agreed upon with the Cabinet.

There have been multiple exchanges of fire on the temporary border between Lebanon and Israel, and Biden stated that he will adhere to his position on the “two country solution” to resolve the Israeli-Palestinian conflict.

President Erdogan of Türkiye made the strongest comments so far on the conflict between Israel and Hamas, claiming that Hamas is not a terrorist organization, but a “liberator” fighting to protect the Palestinian land and people. Türkiye’s stock index fell 7.1% on Wednesday, the biggest drop since February. The index triggered the circuit breaker mechanism twice in the day.

In this regard, Elijah Oliveros-Rosen, chief emerging market economist of S&P Global Ratings, said that when you start to consider which countries may be more vulnerable to the impact of rising energy prices, you must start to focus on net energy importers, such as Chile, Türkiye, and several Asian economies, such as Thailand, the Philippines, and India.

If you consider the order of inflation transmission in the past few years, when the Russia-Ukraine conflict broke out, the initial price spike occurred in the food and fuel fields, and then spilled to the core inflation field. Grunwald said, “for countries that do not have well anchored inflation expectations, a new round of energy price increases may spread, and we may partially repeat the situation we have experienced in the past few years.”

The “ideal central bank” has convinced the market that it will anchor medium-term inflation expectations at all costs, so they can weather the temporary surge in energy prices quite smoothly. However, those central banks that have not yet achieved this will face the risk of having to take further tightening measures again.