Trump
On November 5th, Trump finally won the US presidential election! I think this is a huge positive for BTC/Crypto. Trump will definitely continue to be positive about BTC. The potential sell-off from the U.S. government has disappeared. For my thoughts on Trump, please refer to last week’s article.
Chang’s Thought (2024.11.01): USA Bitcoin – Coincall Academy
FOMC
As expected, there were no surprises from the FOMC. The Fed cut 25 basis points as the market expected. The market did not react much to this news. As I said, cutting 25 basis points when the economy is doing well is not bearish.
ISM Services
ISM services data came in at a very positive 56, beating expectations of 53. The [Supplier Deliveries] indicator improved significantly, which could be a sign that companies are preparing for or seeing increased demand. The U.S. economy still looks strong.
IWM
IWM is an asset I continue to look forward to. Small caps have not benefited much from the bull market that started last year. However, things are changing now. The economy is still doing well, and interest rates are falling. This can significantly reduce the debt burden on companies and improve profitability. The market appears to be excited about that and IWM inflows have increased significantly. I expect IWM to renew its ATH by the end of the year.
BTC ETF
BTC ETF inflows hit an all-time high this week. This is significant in many ways. This suggests that there is a clear interpretation of BTC in the Trump trade on TradFi. As I wrote in last week’s article, BTC is in a very special situation in the positive direction of Trump trading. Trump is clearly likely to lead BTC in a positive direction along with US growth. Also, with the increase in ETF inflows + I think we will see more US states, corporations, pension funds buying BTC in the future. The situation has changed.
ETH
A clear increase in demand can also be seen in ETH. Remember what I said last week, ETH was trading at a very low price and RR was very good. And I thought if ETH further down and broke the uptrend, the market would be over. Using ETH price action as a market proxy has produced very good results. Blackrock and institutional use of ETH chain (RWA/STO), and the clear regulation of crypto coming after Trump’s victory are likely to invigorate ETH and altcoin markets. (This does not mean that SOL performance will be low)
BTC
The BTC order book still has a lot of sell orders, but the increase in buy orders looks very positive. This is a different situation from before. The price is most likely to move sideways until the weekend, and next week should be quite interesting. The market, including the stock market, is in a state of significant uptrend across the board. There may or may not be a price correction, but if the market gives us an opportunity, it seems like a good idea to take it. If the price falls, I think the maximum range will be 71-72k. In my personal opinion, if the market structure does not change much, it seems like it is time to enjoy the bull market.
GOLD
It is unclear exactly what will happen, but it seems clear that one of the driving forces for gold’s rise, the ‘war issue’, is weakening with Trump’s election. Risk assets including BTC are up, but gold is down. Historically, BTC and gold have always followed the same path, but when BTC has a big uptrend, it has outperformed gold. The environment seems ripe for BTC to perform better.
Options
The options market has been hotter than ever this week, with volumes hitting record highs. Implied volatility tends to spike as betting in the options market increases ahead of a major event like the presidential election. The IV for short-term expiry options rose to 100%, but then fell sharply as the event ended. What was special about this event was that CME options volume also increased significantly, with a lot of call betting. This is quite interesting considering that CME is an institutional-sized exchange. Currently, CME options OI has not decreased much, and Deribit appears to be closing out call options positions. It seems like traders are seeing a significant decline in IV and a significant amount of the Trump trade has been completed. Based on what I mentioned above, with the IV fully rebalancing and BTC continuing its bullish trend, I am looking for a good opportunity to buy long-term call options.
NFA DYOR
<Source: Liz Young Thomas, Gunjan Banerji, Coinglass, Material Indicators, Velo, Ambardata>
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