Market Review & Trend Analysis: Crypto Markets Amidst Uncertainty

Article Highlights

• Overview of the impact of the US government shutdown resolution on crypto markets.
• Analysis of market reaction to uncertain macroeconomic data and Federal Reserve statements.
• Assessment of recent Bitcoin and Ethereum performance, focusing on key support and resistance levels.
• Examination of trends in the DeFi sector, including altcoin performance.
• Insight into ETF flows and their impact on the market.

In-Depth Market Analysis

The cryptocurrency markets have experienced a turbulent period recently, driven by a confluence of macroeconomic factors and uncertainty. With the resolution of the 43-day US government shutdown, the SEC and CFTC are resuming operations, prompting some crypto firms to preemptively file IPO and ETF applications. Grayscale, managing approximately $35 billion in assets, has formally submitted its IPO application to the SEC.

However, the market hasn't found respite. Hawkish comments from Federal Reserve officials triggered concerns about a December rate cut, leading to the largest one-month drop in the three major US stock indices. Disney, with its lackluster quarterly revenue, led the Dow Jones decline, while chip stocks and AI concept stocks also experienced a sharp downturn. Although Michael Burry, the real-life inspiration behind 'The Big Short,' clarified that his actual short positions in Nvidia and Palantir totaled only $9.2 million, far less than the reported $912 million, his warnings about an AI bubble and the closure of his fund, Scion Asset Management, heightened market jitters.

The aftereffects of the shutdown are also surfacing. White House officials confirmed that certain key economic data, including the October unemployment rate, may be permanently lost, posing an unprecedented challenge for the Federal Reserve in its efforts to assess economic conditions and determine the path of interest rates. Against this backdrop, several officials, including Minneapolis Federal Reserve Bank President Kashkari, expressed uncertainty or opposition to a December rate cut, and market-implied rate cut probabilities have fallen to 47%.

The current macroeconomic environment presents a high degree of uncertainty: pressured AI investment returns, disagreements over high stock valuations, government shutdown aftermath and data vacuum, widening FOMC divisions, and unclear outlook for Federal Reserve policy direction. Against this backdrop, the market is more cautious about the course it will take in the coming months, especially awaiting further clarification of inflation, labor, and growth trends after data normalization.

Amid the complex macroeconomic environment, Bitcoin's price has fallen below the $100,000 mark, and the Fear & Greed Index has dropped to 15, entering extreme fear. Wintermute analyst Jasper De Maere points out that although Bitcoin and the Nasdaq index maintain a high correlation of about 0.8, they exhibit an unusual negative skew: that is, Bitcoin falls more when the stock market falls; however, its reaction is relatively muted when the stock market rises, and the analysis believes that this is related to investors shifting to high-growth technology stocks and weakening liquidity in the crypto market itself.

Most analysts believe that the short-term correction will continue, generally focusing on the key support level in the $92,000 to $94,000 range, which KillaXBT, pschmitt, Kyle Reidhead, Crypto Auris, and others consider a potential endpoint for the correction or an ideal entry point. Renowned trader Eugene points out that BTC falling below $100,000 represents the first break of the high time frame bullish structure since 2022, and that $100,000 has turned from support to resistance, he will focus on the $90,000 area and is not considering buying the dip in the short term. Analyst Ayl o points out that 65% of the BTC cost basis is higher than $95,000, so there may be stronger selling pressure after falling below this level. Analyst Ali points out that if Bitcoin BTC falls below $95,930, the next key support levels are at $82,045 and $66,900 respectively.

However, there are still plenty of long-term optimists in the market. Haseeb Qureshi, Managing Partner at Dragonfly, believes that current fundamentals remain solid compared to the chain collapses in the industry in 2022, calling it the 'easiest bear market.' Arete Capital CEO McKenna predicts that although there is no hope of hitting new record highs this year, the trend of institutional adoption has not changed, and the Bitcoin price is expected to surpass Trump in the second half of 2026.

Ethereum has also not been spared, with the price falling by more than 10% at one point, and the return to $4,000 is becoming more difficult. Analyst Marcel Pechman points out that Ethereum faces four major challenges: first, on-chain activity continues to weaken, with trading volume and active addresses falling by 23% and 3% respectively in the past 30 days; second, network fees have plummeted by 88%, weakening staking yields; third, pressure from competing blockchains such as Solana and BNB Chain and emerging altcoin ETFs and economic factors are jointly restricting its price performance.

Despite short-term pressure, many investors see this pullback as a buying opportunity. Analyst Donald Dean believes that prices may continue to fall to the strong support area of $2,800 to $3,000, but the risk-reward ratio is gradually improving and can currently be considered an 'accumulation' phase, with long-term price targets of $4,955 and $5,766 respectively. LD Capital founder Yilihua also clearly stated that $3,000 to $3,300 is the best opportunity to buy the dip, and revealed that his team is consistently adding spot positions while waiting for the market to recover.

The altcoin market as a whole has fallen along with the broader market, and many pieces of positive news for projects have failed to resist the negative market sentiment. For example, dYdX announced that it will use 75% of protocol fees for buybacks, and NFT marketplace Magic Eden also announced that it will use 30% of secondary market revenue to buy back tokens and NFTs, but the prices of ME and DYDX coins are still falling. Although Solana has seen inflows for 13 consecutive days since the launch of the spot ETF, its price is still falling below $140, and its probability of breaking its all-time high by 2026 has fallen sharply from 56% a month ago to 6%. Renowned DeFi analyst Ignas has also sold SOL to buy ZEC, saying that this move was influenced by Helius CEO Mert, a Solana ecosystem service provider, although Mert said that he still holds SOL, he has recently become another industry opinion leader who strongly supports Zcash alongside BitMEX co-founder Arthur Hayes.

The market has not been without its bright spots, the Canary XRP ETF has been listed on the Nasdaq, with a first-day trading volume of $59 million, slightly higher than BSOL's $58 million, representing one of the highest figures for new ETFs this year.

Key Data (as of November 14, 2023, 13:00 HKT)

(Source: Coinglass, Upbit, Coingecko, SoSoValue, CoinMarketCap)

• Bitcoin: $97,308 (YTD +3.92%), daily spot trading volume $107.48 billion
• Ethereum: $3,178 (YTD -4.8%), daily spot trading volume $49.08 billion
• Fear & Greed Index: 15 (Extreme Fear)
• Average GAS: BTC: 1.02 sat/vB, ETH: 0.067 Gwei
• Market Share: BTC 59.2%, ETH 11.7%
• Upbit 24-hour trading volume ranking: XRP, BTC, ETH, SOL, AVNT
• 24-hour BTC long/short ratio: 48.11% / 51.89%
• Sector rise and fall: The Ethereum ecosystem fell by 10.6%, and the NFT sector fell by 9.88%
• 24-hour liquidation data: A total of 237,999 people were liquidated globally, and the total liquidation amount was $1.023 billion, of which BTC liquidation was $447 million, ETH liquidation was $260 million, and SOL liquidation was $68.39 million

ETF Flows (as of November 13, 2023)

• Bitcoin ETFs: -$870 million, the second highest in history
• Ethereum ETFs: -$260 million, net outflows for 3 consecutive days
• Solana ETFs: +$1.49 million, net inflows for 13 consecutive days
• Hedera ETFs: +$5.37 million
• Litecoin ETFs: +$698k

Today's Preview

• Binance will remove the C/BNB, C/FDUSD, DOGE/TUSD and NIL/BNB spot trading pairs on November 14
• Binance Alpha will launch the Play Solana (PLAYSOLANA) airdrop on November 14
• Binance will delist the MYROUSDT and 1000XUSDT perpetual contracts on November 14
• Solomon will conduct an IC0 for SOLO tokens on MetaDAO on November 15
• Starknet (STRK) will unlock approximately 127 million tokens at 8 a.m. on November 15, which is 5.34% of the current circulating supply, worth an estimated $17.7 million; WalletConnect Token (WCT) will unlock approximately 124.9 million tokens at 8 a.m. on November 15, which is 65.21% of the current circulating supply, worth an estimated $15 million; Sei (SEI) will unlock approximately 55.56 million tokens at 8 p.m. on November 15, which is 1.11% of the current circulating supply, worth an estimated $9.6 million;
• Largest declines in market capitalization of the top 100 currencies today: Story fell by 19.9%, Aerodrome Finance fell by 16.7%, Jupiter fell by 14.6%, Pudgy Penguins fell by 12.8%, and Aave fell by 12.3%.

Trending News

• "The giant whale that previously shorted 66,000 ETH" repurchased 16,937 ETH worth $53.91 million
• GAIB announced its token economics: the maximum total supply is 1 billion, and the community ratio is 40%
• Anchorage Digital has received nearly 4,094 BTC worth $405 million in the last 9 hours
• Magic Eden announced that it will use 30% of secondary market revenue to repurchase ME tokens and NFTs
• Liquid staking protocol Drop announced that it will orderly cease operations and cancel the TGE and Airdrop
• Only $1.9 million of the $3.437 million that Huang Licheng deposited into HL remains after losses, and total losses are $17.5 million
• Uniswap recorded a new monthly trading volume, with trading volume in October reaching approximately $116.6 billion
• Bitfarms' third-quarter revenue was $69 million, with a focus on transitioning to AI computing power infrastructure
• Infinex will soon launch TGE for INX tokens, and Patron NFT holders can allocate 100,000 INX tokens