After BTC breaks through $69,000, what will be the next target?
Original title: "SignalPlus Macro Analysis Special Edition: Range Break?"
Original source: SignalPlus
Last week, the market was relatively calm, and risk appetite continued. The US stock market, US Treasury yields, US dollar exchange rate, gold and BTC prices were all close to mid-term or year-to-date highs. The US economic data was strong, with retail sales higher than expected (actual monthly increase of 0.6%, control group monthly increase of 0.7%), and the number of unemployment claims remained stable, continuing to support the narrative of a soft landing.
Earnings season also worked in the market’s favor, with U.S. banks, Netflix and TSMC (up 9.8%) all beating expectations, and the SPX rising for six straight weeks, its best streak of the year, while investors remain confident in the market and corporate earnings, with options-implied earnings-day volatility about 5% below the recent average.
The recent focus is naturally on the US election. There has been a lot of discussion recently about the divergence between Polymarket's forecast (Trump's chance of winning is 60%) and traditional forecasts (still close to 50/50). Regardless of the details, macro asset trading may carry the tendency of Trump's victory into November. With bond traders generally expecting Trump to promote fiscal spending more actively in his second term, the recent trend of US bond yields has shown a very high correlation with the probability of Trump's victory.
BTC seems to be waking up from a long slumber, breaking through its downward channel and seeking to challenge historical highs before the election. The recent breakout above $68,000, combined with the ETFs seeing inflows of around $2.4 billion over the past six trading days and a corresponding surge in BTC futures open interest, could be a positive indicator that new long positions are being established in the market.
Encouragingly, the increase in BTC inflows coincided with a significant increase in Chicago Mercantile Exchange (CME) derivatives trading activity, with CME futures open interest exceeding $11.5 billion, a new all-time high. Furthermore, according to K 33’s research, the growth in CME open interest was driven by “direct participants” rather than leveraged inflows, which presents a healthier bullish structure and a more aggressive buying bias. Additionally, given that traditional finance (TradFi) participants are mostly restricted from trading on centralized exchanges, the surge in CME trading activity also indicates the entry of more mainstream and TradFi participants.
The market is currently focused on the US election. For cryptocurrencies, the most favorable outcome is that Trump wins and the Republicans sweep the Senate and House, giving the Trump/Vance-backed digital asset reform plan a chance to pass Congress. The second option is that Trump wins but Congress is divided. The reform plan may encounter some resistance from the House Financial Services Subcommittee, but current senior congressman Maxine Waters has previously urged the inclusion of stablecoin legislation in the defense bill.
On the other hand, if Harris is elected but Congress is divided or controlled by the Republicans (the probability of a Democratic sweep is low), it will bring more uncertainty. Harris has not yet elaborated on any cryptocurrency-related policy goals, only saying that he wants to "encourage innovative technologies such as AI and digital assets." Let's keep watching!
