The cryptocurrency market demonstrated confident growth last week, with Bitcoin trading in the range from $62,270 to $69,000. Since the beginning of the week, Bitcoin has risen by 8.98%, reaching $68,268, while Ethereum (ETH) has added 7.03%, rising to $2,642. The rally began on Monday during the Asian session, when a breakout of $63,400 triggered protective stops on short positions. According to Coinglass, $55.4 million in BTC shorts were liquidated in 24 hours. The growth was supported by positive economic data from China and the United States, as well as a recovery in investor demand.
Among the key events of the week, it is worth noting the recovery in demand from international investors for digital currencies. According to Emerging Portfolio Fund Research (EPFR), since the beginning of autumn, the inflow of funds into specialized crypto funds has averaged about $0.5 billion per week, which is 68% higher than the August figures. Statements by US presidential candidates Kamala Harris and Donald Trump also had a positive impact on the market. In general, the week demonstrated steady market growth against the backdrop of favorable macroeconomic factors and increased investor interest. However, proximity to historical highs and possible fluctuations in traditional financial markets require market participants to be extra cautious and closely monitor key support and resistance levels. Any unsuccessful breakthrough of Bitcoin down to $68,800 could cause a massive fixing of long positions among retail investors. And so external conditions and seasonal factors are on the side of buyers.
There are two weeks left before the US elections, which many consider key for crypto in the medium term. According to Polymarket, bets on Donald Trump’s victory are ahead of Kamala Harris. On the weekly timeframe, Bitcoin, which has been consolidating in the range of $55-70 thousand for the last six months, is technically preparing to break through the historical maximum and accelerate to at least $80 thousand. This consolidation, moreover, took place while the rest of the crypto market was mostly declining (except for memecoins and several key assets like Solana). The selling pressure of the bankrupt exchange Mt. Gox, the negative effects of the US SEC lawsuits, and the “expulsion” of market makers from the US have already been absorbed. Inflows into exchange-traded funds (ETFs) are stable. According to on-chain analytics, “whale” wallets (which hold from 1,000 to 10,000 BTC) have been accumulating coins all this time. It is now difficult to imagine fundamental or realistically predictable macroeconomic and political factors that could prevent “digital gold” from showing a quality performance in the fourth quarter of 2024. Of course, there will be pullbacks. Of course, there will be serious volatility and the “landing” of players abusing leverage immediately during and after the elections. But for now, the path is up.
And what about altcoins? Things are not so simple and straightforward with them. Ethereum in the ETH/BTC pair continues to show weakness. Bitcoin’s market capitalization has reached $1.35 trillion, which is now $1 trillion more than the second cryptocurrency, Ethereum, against the backdrop of the BTC price, trading just above $68,000. Ethereum’s market capitalization is $318.32 billion.
Many other assets look ready to break out of multi-month consolidations. But the specific market share of BTC is also at multi-year highs now, and without the start of fixing the flow of liquidity into altcoins (for example, through the growth of the ETH/BTC pair), it is premature to bring all capital into the market. It is worth being careful and risk-managing until the end. We have endured most of the negative phase of the market, and it would be a shame to stumble before the start of the bull market cycle due to a few unnecessary mistakes.