This week, crypto markets experienced heightened volatility, driven by macroeconomic developments, significant ETF inflows, and increased anticipation around the upcoming U.S.elections. Bitcoin attempted to retest its local top of $69,500, but eventually found support at $65,000, settling into a consolidation pattern as traders adjusted their positions ahead of key events.
Macroeconomic Overview
The broader financial landscape was shaped by a mix of macro factors, election developments, and unexpected regulatory news. Bitcoin ETF inflows remained strong, totaling $997.7 million for the week, marking a third consecutive week of positive flows.This consistent institutional interest reflects an appetite for exposure ahead of the U.S.presidential elections, which are widely seen as a potential catalyst for crypto markets.
Bitcoin dominance rose to a high of 59.75%, while ETH/BTC saw a significant drop, breaking below key support at 0.03850 and reaching a new low at 0.03625. This indicates a preference for Bitcoin as market participants brace for potential risk events. Meanwhile, reports of an alleged U.S. government investigation into Tether sent USDT briefly below $1, highlighting the fragility of stablecoin confidence amidst regulatory scrutiny. In the Middle East, geopolitical tensions escalated with Israeli retaliatory strikes on Iran, adding a layer of uncertainty to markets.
Crypto Market Dynamics: Bitcoin’s price action was largely defined by its inability to break through the $69,500 resistance level, although strong ETF inflows provided support and kept the market buoyant. Despite the broader risk-off sentiment stemming from geopolitical events and the USDT situation, BTC managed to maintain a floor at $65,000, consolidating in preparation for the upcoming non-farm payroll (NFP) data.
Trump’s appearance on the Joe Rogan Experience podcast generated substantial interest, driving his betting odds above 66% on Polymarket. Despite Bitcoin being touted as a “Trump Trade,” its correlation with Trump’s odds appeared to weaken this week as BTC’s rally faltered near key resistance. Meanwhile, BTC perpetual open interest across exchanges stood at $27 billion, approaching this year’s peak, which could trigger volatility if the $70k level is breached.
In Ethereum, the narrative diverged. ETH played catch-up to BTC over the weekend, gaining 2% during low liquidity hours. However, ETH failed to sustain momentum and continued to lag behind Bitcoin, reflecting ongoing investor preference for BTC amid macroeconomic uncertainty. ETH/BTC continued to slide, marking a sharp divergence in investor sentiment.
Key Trades and Market Activity:
● BTC Structures:
○ This week saw significant activity in BTC options, particularly around the $70,000 strike. Traders were largely positioning for potential upside, with numerous call spreads and outright calls being bought. The top trade was the purchase of 975contracts for the 29-Nov-24 $85,000 strike, reflecting optimism for a post-election breakout.
○ A notable custom structure involved selling a bull risk reversal on the 8-Nov-24 $67,000/$75,000 strikes, suggesting some traders were looking to hedge against potential downside in the lead-up to the U.S.elections.
● ETH Structures:
○ ETH options saw balanced flows, with a mix of call calendars and custom structures being traded. A key trade involved a large custom structure centered on the 1-Nov-24 $2,550 strike, with 2,000 contracts traded, reflecting mixed sentiment on ETH’s near-term prospects.
○ The divergence between BTC and ETH options flows highlights a cautious approach from traders, with more downside hedges appearing in ETH structures compared to BTC.
Outlook: Looking ahead, the focus will shift to key macroeconomic data releases and the U.S. elections. Thursday’s Core PCE and Friday’s NFP data are expected to provide further clues on the Fed’s direction, with the market currently pricing in a 95.1% probability of a 25 basis point rate cut in November. This, coupled with rising odds of a Trump victory, is expected to drive further volatility in the crypto space.
Despite the political backdrop, Bitcoin’s fundamentals remain strong, with consistent ETF inflows and a rising dominance ratio. The broader market sentiment appears cautiously optimistic, with traders preparing for potential upside but also hedging against downside risks. The $70,000 level for Bitcoin remains the key barrier to watch, with a successful break likely setting the stage for new all-time highs.
In summary, the week was defined by volatility, strong institutional demand, and a market preparing for a decisive U.S. election outcome. Both BTC and ETH are positioned near key resistance levels, with macro events and political developments likely to dictate the near-term trajectory of the market.
Website: www.coincall.com
X com: https://x.com/coincall_global
Telegram: https://t.me/CoinCall_Exchange
As the largest altcoin options exchange by trading volume, Coincall offers over 10 exclusive altcoin options like ORDI, SOL, KAS, LINK, and BNB, with USDT-denominated pricing and strong liquidity. Prioritizing security with 100% third-party custody, Coincall provides a seamless trading experience for all users, offering both ‘pro’ and ‘lite’ versions to suit beginners and professionals alike.
Comments