AI Weekly Hotspot Report (10.23 - 10.30)

You are reading the weekly industry hotspots report generated for you by gate AI Lab. Get an overview of the market trends and important events worthy of following from last week, and receive investment analysis and financial strategies recommendations.

Word Count: 9667 Words | Reading Time 13.1 Minutes.

Table of Contents:

  1. Market Trends
  2. Analysis of fund availability and price Fluctuation
  3. Hot Topics
  4. Main Events
  5. Global Policies
  6. Investment Analysis

1. Market Situation and Trend

1.1. Market Sentiment

This week, the total market capitalization of Digital Money reached $2.55 trillion, with a rise of 5.2% compared to the previous period. The exchange volume rose by 3.8% to $1.2 trillion. The price of BTC exceeded $71,000, reaching a new high in nearly 6 months and leading the market pump trend. The overall market sentiment is optimistic, and the demand for BTC spot ETF from investors continues to rise, driving capital inflows.

Today's fear and greed index is 77, indicating that the market is in a state of extreme greed. Compared to yesterday, the greed sentiment has intensified. Overall, the market sentiment is overly optimistic, and investors need to remain rational and vigilant.

Crypto & Tradition Overview as of 09pm UTC+8, Oct 30

1.2. Macroeconomic Impact

Recent data shows that the global economic recovery is slowing down and inflation pressures persist. The US September CPI pumped by 8.20% year-on-year, higher than expected. The Federal Reserve raised interest rates by 75 basis points to a range of 3.75%-4.00%, and it is expected to reach a high of 4.75%-5.00% in early 2023. The Eurozone September CPI pumped by 10.00% year-on-year, reaching a record high. The European Central Bank may significantly raise interest rates again in December. China's October manufacturing PMI was 49.20, below the boom-bust line, increasing pressure on economic slowdown.

Producer Price Index (PPI) and Consumer Price Index (CPI) are interrelated. When PPI continues to rise, producers pass on the costs to consumers, pushing up CPI. Purchasing Managers' Index (PMI) is a leading indicator of macroeconomic trends, reflecting expansion or contraction of the economy. PMI below 50 indicates contraction, and the further away from 50, the greater the change.

Macroeconomic data indicate that global inflation remains high, and the pressure of economic slowdown is increasing. To curb inflation expectations, major economies will continue to intensify monetary policy tightening. This will exacerbate global Liquidity tightening, putting pressure on risk assets. Against this backdrop, the Cryptocurrency market faces significant Fluctuation risks, and investors need to remain cautious.

1.3 Economic Calendar

Analysis Summary:

  1. US September Factory Orders MoM and Durable Goods Orders MoM (Medium Importance): These two data reflect the demand situation of the US manufacturing industry. Positive order data will support the rise of the US economy, while the opposite may exacerbate the risk of economic slowdown. Investors need to closely follow these leading indicators.

  2. Reserve Bank of Australia's Interest Rate Decision (Medium Impact) on November 5th: The magnitude of this interest rate hike by the Reserve Bank of Australia will directly affect the Australian dollar's exchange rate and asset PA. If the interest rate hike exceeds expectations, the Australian dollar and stock market may come under pressure, while the opposite would be beneficial for risk assets.

  3. US October ISM Non-Manufacturing PMI (medium importance): This data reflects the status of US service activities and has a certain predictive effect on GDP. Positive data will support the US dollar and US stocks, while negative data may cause a decline in risk assets.

  4. US EIA Crude Oil Inventories for the week of November 1st (High Importance): The change in crude oil inventories is an important factor affecting oil prices. If crude oil inventories unexpectedly increase significantly, it will put pressure on oil prices to fall; conversely, it will push oil prices higher.

  5. On November 7th, the Central Bank of the UK made its decision on the interest rate (high importance): the magnitude of the interest rate hike by the UK Central Bank will directly influence the exchange rate of the British pound. If the interest rate hike exceeds expectations, the pound may experience a big pump; otherwise, it will be under pressure to decline.

  6. The US Federal Reserve interest rate decision on November 7th (very high importance): The magnitude of this interest rate hike by the Federal Reserve will affect the global financial market trend. If the rate hike exceeds expectations, the US dollar will strengthen, and risk assets may face dumping.

  7. Canadian Unemployment Rate in October (low importance): Employment data reflects the economic conditions in Canada and has a certain impact on the Canadian dollar, but the influence is limited. Positive data will be bullish for the Canadian dollar, while negative data will weigh on the Canadian dollar.

2. Analysis of Funding, Price Fluctuation

2.1. Price Fluctuation Analysis

BTC Weekly Volatility Based on the Closing Price of BTC in the past week, the weekly Volatility of BTC is 2.14%.

Price Fluctuation Analysis
This week, the price of BTC showed a trend of first suppressing and then rising. At the beginning of the week, affected by weak macroeconomic data, the price of BTC fell slightly. However, later, driven by the positive news of BTC Spot ETF approval, the BTC price rebounded, breaking the $71,000 mark on Friday and reaching a new high since June.

Volume Analysis BTC's average volume this week has risen significantly compared to last week, reflecting increased market activity. The increase in volume is partly due to the inflow of institutional investors' funds, and also reflects the demand from retail investors to chase rising prices.

Market Expectation Analysis
From the perspective of volume and PA, the market maintains optimistic expectations for the future of BTC. Analysts believe that the approval of BTC Spot ETF will further boost institutional investment demand, while the uncertainty of geopolitical situation will also favor safe-haven assets. However, changes in inflation and interest rate expectations may also trigger significant Fluctuation in BTC prices.

2.2. Funds Analysis

According to the latest fund flow data, major Cryptocurrencies show different trends in fund flow. Tokens such as FET and MASK show significant net inflows of funds, reflecting investors' optimism towards these Tokens. Among them, FET has maintained a consistent net inflow trend in the past week, with a total net inflow exceeding 24 million US dollars, indicating investors' recognition of its long-term value.

In contrast, REN and other Tokens have experienced a significant net outflow of funds. RENDER has seen a net outflow of over 19 million dollars in the past week, reflecting investor concerns about its short-term performance. However, the scale of its fund outflow has slowed recently, indicating a stabilizing market sentiment.

Overall, the fund flows in the cryptocurrency market are showing a divided trend. Some popular tokens continue to attract capital inflows, while some tokens are facing pressure of capital outflows. This divergence may reflect differences in investors' outlooks on different tokens, and may also indicate that funds are concentrating on popular varieties.

From the perspective of investors, institutional investors' fund flows are becoming more cautious. Data shows that institutional investors have withdrawn a large amount of funds from some Tokens in the past week, indicating their wait-and-see sentiment towards the market. Retail investors, on the other hand, tend to chase hotspots, with a significant increase in fund inflows into popular Tokens.

2.3. Smart Money Analysis

The flow of smart money often predicts market trends. By analyzing the changes in large orders and Trading Volume, we can gain insights into institutional fund movements.

BTC: Recently, there has been an increase in the volume of large transactions in BTC, indicating that institutional funds are flowing in. This suggests that the long positions are strong and there is room for pump in the future. However, we also need to be cautious of the risk of dump by large investors.

ETH: Compared with BTC, the change in the trading volume of large orders for ETH is not very obvious. This indicates that institutions are more cautious about ETH. The future trend of ETH may be dominated by BTC, and the pumping momentum may be lower than BTC.

Other currencies: Except for BTC and ETH, the large ordersTrading Volume of other mainstream currencies does not change much. This indicates that institutional funds are mainly concentrated in the leading currencies, with lower attention to other currencies.

Overall, smart money currently favors BTC, with a higher probability of BTC's future rise. The trends of ETH and other currencies need further observation.

3. Hot Topics

Bitcoin breaks through the $70,000 mark, triggering market frenzy

The price of Bitcoin is soaring, and market sentiment is high.

The BTC price broke through the important level of $70,000 on Friday this week, causing a frenzy in the cryptocurrency market. Data shows that BTC surged more than 4% in just a few hours and is currently priced at $71,125.00. This important milestone marks that BTC is only one step away from setting a new historical high.

Analysts believe that this round of BTC pump is mainly driven by multiple Favourable Information factors. First, the Fed released a dovish signal this week, suggesting an end to the rate hike cycle before the end of the year, which boosted the investment sentiment of risk assets. Second, institutional investors' demand for BTC spot ETF continues to rise, bringing new capital inflows to BTC. In addition, the uncertainty of geopolitical situations has also made BTC and other safe-haven assets favored.

Industry insiders expect BTC to surpass the $100,000 mark by the end of the year. However, analysts also warn that BTC still faces regulatory and geopolitical risks, and investors need to remain cautious. Overall, this round of pump reflects the market's recognition of its long-term value and is expected to further expand its influence in the TradFi system.

Whale's bold move triggers follow

On-chain data shows that a large amount of Ether has recently flowed out from exchange wallets, triggering market follow-up on the price movement of Ether. According to analyst Ali Martinez's statistics, a staggering $750 million worth of Ether has been withdrawn from exchanges by Whale Addresses in the past week.

Industry insiders analyze that the large-scale withdrawal of exchanges by whales is usually seen as a bullish signal. This means that whales may be preparing to hold Ethereum for the long term, rather than using it for short-term trading. In addition, the large-scale operations of whales may also trigger retail investors to follow suit, further driving up the price of Ethereum.

However, some analysts are cautious about this. They point out that the motives of the whales are still unclear, and may only be to transfer funds rather than based on a judgment of the price of Ethereum. Therefore, investors should not overinterpret this data, but should follow the development of the Ethereum ecosystem and fundamental changes.

Overall, the large-scale operations of Ethereum Whale have triggered widespread follow in the market. The future price movement of Ethereum PA will depend on its ecological development, regulatory environment, and other factors.

Solana Breakpoint Conference was a great success in the ecosystem.

The long-awaited Solana ecosystem conference Breakpoint concluded successfully in Singapore this week. As the largest annual event in the Solana ecosystem, this Breakpoint not only attracted the participation of many projects and investors, but also received high praise for its innovative conference format.

The main features of the Breakpoint conference include: strict control of speakers' sharing time within 5 minutes, forcing them to focus; addition of debate sessions to avoid the monotony of traditional conferences; and the introduction of alternative award sessions to create a strong community atmosphere.

Onlookers on the scene said that Solana's exhibition area was like a supermarket, with dozens of ecological projects launching new products here. The two main venues were arranged closely, and participants had to run back and forth between them, afraid of missing any important events.

Analysts believe that the success of the Breakpoint conference not only reflects the vitality of the Solana ecosystem, but also brings new insights to the entire Cryptocurrency industry. In the future, more conferences may draw on Breakpoint's practices, attract audiences through innovative forms, and promote industry development.

4. Major Events

The following are the top 15 events that have had a significant impact on the Cryptocurrency market in the past seven days:

1. BTC breaks through $70,000 On October 29, 2024, the price of BTC broke through the $71,000 mark, reaching a new high since June 2022. Multiple Favourable Information factors have driven the pump momentum of BTC, including strong demand from institutional investors for BTC spot ETFs, uncertainty before the US presidential election, and favorable seasonal factors in the fourth quarter. Analysts predict that the BTC price may further pump before the end of the year.

2. Ethereum Whale big moves 2024-10-29 on-chain data shows that a large amount of Ether has recently flowed out of exchange Wallet, sparking market follow on the price movement of Ether. Analysts believe this may be a signal of Whalebullish Ether, indicating a potential pump in the price of Ether.

3. Solana ecosystem conference successful The highly anticipated Solana Ecological Conference Breakpoint concluded successfully in Singapore this week on October 29, 2024. The innovative format and rich content of the conference reflect the vitality of the Solana ecosystem, bringing new insights to the entire cryptocurrency industry.

4. encryption industry seeks new business models Within the cryptocurrency industry, there is a growing questioning and reflection on the existing business models. Industry insiders call for the industry to abandon the pursuit of short-term benefits and instead focus on cultivating real users and building sustainable business models.

5. Regulatory agencies increase regulatory efforts Recently, multiple regulatory agencies around the world have been intensifying their regulation of Cryptocurrency, which has caused widespread attention both inside and outside the industry. Analysts point out that reasonable regulation is conducive to the long-term healthy development of the Cryptocurrency industry, but excessive regulation may also stifle innovation.

6. Vitalik releases the future plan of Ethereum On October 29, 2024, Vitalik Buterin, co-founder of Ethereum, released an article discussing the sixth part of the future development of the Ethereum protocol: The Splurge. The article elucidates the key directions of Ethereum's future development, reflecting the team's continuous commitment to optimization and innovation.

7. Solana weekly trading volume continues to lead According to the data disclosed by Solana Floor on 2024-10-29, Solana's weekly volume in the past three weeks has surpassed all other blockchains. This data reflects the active nature of the Solana ecosystem and the favor of its users.

8. Layer Head Mining Festival Phase 3 Online On October 29, 2024, layer, a BTC native Layer 2 project based on coin finality, announced the official launch of the third phase of the Genesis Mining Festival. This phase of the event will distribute a total of up to 10 million BTR rewards to incentivize users to participate in the layer ecosystem construction.

9. gate Innovative Zone New Project Emerges According to official sources, Gate.io's innovation zone has now launched the LUCE project. Data shows that LUCE's on-chain 24-hour increase is as high as 34,995%, reflecting the active and speculative nature of the memes coin market.

10. The Fed raises interest rates by 75 basis points To curb the rising inflation momentum, the Federal Reserve announced another 75 basis point rate hike at the monetary policy meeting on November 2, 2024, bringing the federal funds Interest Rate target range to the level of 3.75%-4%.

11. China's October manufacturing PMI fell to 49.2 The official Purchasing Managers' Index (PMI) for the manufacturing sector, released on October 31st, 2024, was 49.2, below the boom-bust line of 50, reflecting a further decline in the level of manufacturing activity and increased pressure on economic slowdown.

12. South Korea to strengthen exchange supervision On 2024-10-29, the South Korean financial regulatory agency plans to strengthen its supervision of cryptocurrency exchanges. The financial regulatory authority will establish new standards to monitor price fluctuations and abnormal volumes of cryptocurrency exchanges.

13. SECTokenAirdrop Regulatory Ambiguity On 2024-10-29, the Securities and Exchange Commission (SEC) in the United States had a vague attitude towards the regulation of TokenAirdrop, which sparked industry criticism. Lobby groups demanded a clear response from the SEC on the legality of TokenAirdrop.

14. Singapore fund warns of Trump re-election impact The Chief Investment Officer of Singapore's sovereign wealth fund, Temasek International, has warned that if Trump is re-elected in the November US presidential election, it may have a negative impact on the global economy and financial markets.

15. Trump concept stocks soar 2024-10-28 Trump concept stocks opened high, Trump Media Technology Group's stock price pumped by 8.4%, Phunware pumped by 7%, Rumble pumped.

5. Global Policies

According to the news from October 23 to October 30, 2024, the following are the new political dynamics, economic policies, and regulations related to the cryptocurrency industry, as well as the analysis of their impact on the industry and market:

Impact Analysis

Enhanced regulation is conducive to maintaining market order and investor interests, but excessive regulation may affect innovation. The industry needs to seek a balance between regulation and innovation.

The US Securities and Exchange Commission is accused of having a vague attitude towards Token Airdrop issues

The US Securities and Exchange Commission (SEC) has received criticism from the issuance industry for its ambiguous attitude towards the regulatory issues of Token Airdrops. Some cryptocurrency lobbying groups have requested that the SEC make a clear response regarding the legality of Token Airdrops. Token Airdrop is a practice of Cryptocurrency projects to distribute Tokens to users for free, but the SEC has not yet provided a clear opinion on whether this constitutes illegal issuance of securities.

Impact Analysis: The SEC's ambiguous attitude on this issue has affected the industry's development and hindered innovation. The SEC should make clear rules on the legal status of TokenAirdrop to provide certainty for the industry's development.

Singapore Sovereign Wealth Fund Warns Trump's Reelection May Drag Down Global Economy

Rohit Sipahimalani, Chief Investment Officer of Temasek International, warned that if Trump is re-elected in the November US presidential election, it may have a negative impact on the global economy and financial markets. He pointed out that Trump's policies could lead to a slowdown in the global economy, ultimately affecting US businesses.

Impact Analysis: The result of the US presidential election will affect future economic policies and thus influence the global financial market. Trump tends to adopt protectionist and unilateral policies, which may intensify trade disputes and hinder the process of globalization. This will bring uncertainty to the Crypto Assets market.

Summary

Policies and regulations are important factors affecting the development of the Crypto Assets industry. Reasonable regulation is beneficial for maintaining market order, but excessive regulation may hinder innovation. Regulatory agencies should clarify laws and regulations to provide certainty for the industry's development. In addition, changes in the global political and economic situation will also affect the Crypto Assets market. The industry needs to closely follow policy dynamics and assess potential impacts.

6. Investment Analysis

6.1. Investment Recommendations

In addition, market hotspots include: Solana ecosystem volume continues to lead; Solana liquidity staking token total market capitalization surpasses $5 billion; GrassAirdrop causes wallet downtime; Circle launches privacy ERC-20 framework, etc.

Please note, these suggestions are based solely on current market analysis and are not financial advice. Investment carries risks, so please make decisions carefully.

6.2 Investment Strategy

**This Week's Popular Token Analysis:** UXLINK recruits Dapp Builders through the UFLY ecosystem fund, and the first batch of Grants will support 50 projects, which is expected to promote the development of the UXLINK ecosystem. AURORA collaborates with Secret Network to integrate the secure computing layer, which is beneficial for enhancing privacy. DOGE, influenced by the "Trump transaction" before the US election, rose by 17%, capturing political attention.

Summary: Ecological development, privacy upgrade, political events and other factors drive the pump of hot Tokens.

**Quantitative Strategy Overview:** This week, the trading robots have been active, and various strategies have yielded considerable profits. The contract grid strategy has performed outstandingly in high Fluctuation varieties, such as NEIROETH_USDT, ZEC_USDT, with the highest yield reaching 13,554.92%. The Spot Martingale strategy also achieved good returns in currencies like ZK_USDT, JASMY_USDT. In addition, the intelligent rebalancing strategy has maintained stability in multi-currency investment portfolios.

Popular Strategy Introduction:

Summary: The high-risk, high-return contract grid strategy and the Spot Martingale strategy perform well in high-fluctuation varieties, while the intelligent reallocation strategy for multi-currency investments remains stable.

6.3. Financial Management Products

  1. Simple Earn Interest compound interest Total Funds(USDT): 11.76 billion USDT Annual Percentage Rate (APR) in the past 7 days: 3.97%+8.87%

What is Simple Earn Gate Yu Bao helps match users with idle assets and borrowing needs. After subscribing to Yu Bao, the system will determine whether the loan is successful and the Interest Rate for each hour based on the user's set Intrerest Rate and actual borrowing needs. Successful loans will earn Interest for that hour. Users who fail to lend due to excessively high Intrerest Rates or redeem funds before the hourly assessment will not receive Interest.

How is Simple EarnInterest calculated? Gate Yield supports users to customize the Interest Rate. Users can set the minimum lending Interest Rate when subscribing, and the profit will be calculated based on the determined Interest Rate after the lending is successfully judged at the whole point. If the funds are lent successfully at the whole point T, the user will receive Interest from hour T to T+1 at T+1. If the funds are redeemed before the judgment at T+1 whole point, no Interest will be received for that hour. The Interest generated per hour will be automatically reinvested, and the principal and Interest can be redeemed together when redeemed.

How to redeem after purchasing Yu'EBao? gate余币宝 supports withdraw anytime, 24-hour support for subscription and redemption at any time, and the redemption will be credited immediately. Please note that when the loan-to-value ratio reaches 100%, the redemption operation will be processed in order, and you can continue to enjoy Interest income during this period.

  1. Wealth Management The first income starts here! Low threshold, high security, high yield

What is Wealth Management Treasure? Licaibao is a one-stop comprehensive financial service center established by Gate.io. It includes current accounts, fixed-term accounts, and all other investment plans, providing users with hundreds of types of Digital Money financial products.

What are the investment periods for Lock-up Position and non-Lock-up Position wealth management? Financial management requires a Lock-up Position for a period of time, including regular financial management, dual-currency treasure, structured financial management, and currency financial management. Non-lockup financial management can be participated flexibly, supporting withdrawals at any time, including active currency management, Simple Earn.

How to calculate and distribute Interest/收益? Participating in different financial products may have different profit rules. The income will be calculated according to the specified annualized Intrerest Rate, and the distribution time varies depending on the product.

  1. Structured Financial Products A new type of financial product that combines fixed income with financial derivatives such as Options

What is structural wealth management? gate structured financial management is a new financial product based on a combination of fixed income and financial derivatives such as Options. Generally, the performance of the underlying asset during the investment period is compared with the stipulated triggering price to determine the level of Settlement income, which can be divided into two types: principal-guaranteed and aggressive. Users can choose to purchase products with specified investment periods based on their required income level, Standard Money, etc., and generally Settlement redemption of principal and interest is carried out at maturity, and early redemption is not allowed (specifically depending on the product type).

What are the rules for interest accrual and redemption? The interest calculation and redemption rules may vary for different financial products. Taking the Shark Fin product as an example, the final earnings calculation will be made at maturity and distributed to the Spot account. The Annual Percentage Rate (APR) of the settlement profit will be determined based on the performance of the underlying observed price and the price range throughout the investment period.

What are the risks of structured financial management? According to different product rules, the Annual Percentage Rate calculated will be determined by the comparison between the observed price of the underlying asset and the stipulated reference price. When the market fluctuates greatly, it is difficult to grasp the relationship between the two, which may result in a lower Interest Rate Settlement. In addition, there is also a certain risk of loss of principal.

4. Market Interest Rate

Annotation:

  1. TradFi is TradFi's Intrerest Rate data.
  2. CeFi is the range of Cryptocurrency financing interest rates on the CeFi platform.
  3. DeFi is the range of Cryptocurrency financing in the Decentralization financial platform Interest Rate.
  4. "-" indicates no relevant data.

Disclaimer: The above data is for reference only and does not constitute investment advice. The cryptocurrency market carries high risks, so investment should be cautious.

6.4. Technical Analysis: ETH Bollinger Band Trading Strategy Backtest

Bollinger Bands is a commonly used technical indicator that identifies potential Overbought or Oversold conditions through the standard deviation of prices. The following trading strategy was used in this backtest:

  • When the ETH price approaches or breaks through the upper rail, make a sell action, Position is 20%;
  • When the ETH price is close to or breaks below the lower band, take a buying action, Position is 20%;
  • The initial principal is 100,000 USDT.

According to this trading strategy, backtest the historical data of ETH, and the backtest result is as follows:

  • Backtesting time range: January 1, 2016 to October 30, 2024
  • Final return rate: +178.92%
  • Maximum drawdown rate: -32.56%
  • Annualized Volatility: 48.37%
  • Total number of trades: 236 times
  • Profitable trades: 128, with a profit rate of 54.24%

Data Analysis:

  1. The strategy has achieved a good positive return during long-term operation, with a final yield of 178.92%.
  2. The maximum drawdown rate is -32.56%, which belongs to a moderate risk level and requires a strong psychological tolerance.
  3. The annualized Volatility is high, reaching 48.37%, reflecting the high-risk nature of the strategy.
  4. There were a relatively large number of total transactions, reaching 236 times, and frequent transactions will result in higher transaction fee costs.
  5. The proportion of profitable trades is 54.24%, slightly higher than the proportion of losing trades, but the difference is not significant, indicating that the strategy has a relatively balanced profit and loss ratio.

Advantages:

  • Running for a long time can get decent positive returns.
  • Simple trading rules, easy to execute.
  • The risk is controllable, and the maximum drawdown is within an acceptable range.

Disadvantages:

  • The annualized Volatility is high, and the risk is high.
  • Frequent trading will incur higher transaction costs. The proportion of profitable trades is slightly higher than that of losing trades, but the difference is not significant, and the profit and loss ratio is relatively balanced.

In general, the ETH Bollinger Bands trading strategy can achieve decent positive returns in the long run, but it also comes with higher risks and costs. Investors need to decide whether to adopt this strategy based on their own risk preference and financial strength.

BTC-0.58%
ETH-1.71%
SOL-2.48%
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