So it's almost the end of October, the month that historically has been largely the time when the green returned to the cryptocurrency market. And it is likely that this is the case. From the night of October 25 to the early morning of October 26, the price of BTC had a strong increase, followed by a series of altcoins. Let's review the market with Holdstation in the period to mid-November through this analysis!
Comment on the onchain's situation
Exactly what the October scenario analysis said. Last night the price of BTC and a series of altcoins had a market pullback phase. After completing the accumulation triangle pattern, the price of BTC is trending to break the pattern and go up.
However, when looking at the number of stablecoins transferred to the exchange, the individual writer did not see any unusual or skyrocketing volume. The number of stablecoins loaded on the exchange is not much, even decreased compared to the September period. Therefore, the new money flow into the market to catch the bottom is not yet available. It is highly likely that this is just the money flow of the big players who preyed on the market's recovery thanks to positive macro news.
Assessment of the macro situation
New UK government has a positive view on crypto
The first is news about the UK government setting up a vote to recognize Bitcoin and Crypto as financial instruments. Combined with that is the new UK Prime Minister, Rishi Sunak, has been positive about his views on crypto. The new cult of the country has mentioned the creation of specific policies and rules for crypto. Helping the cryptocurrency market, which does not have a very positive view, will have a specific route to becoming legal.
Dollar Index falls
Last night, the DXY dollar strength index also broke through support, which was a big factor leading to the price of BTC pumping so strongly. Holdstation also had an analysis of the strong impact of the DXY index on the price of BTC here
DXY is having the next support at around 109. If it continues to break this level, BTC will aim for 23k, 25k and 28-30k respectively. But however, investors and users must also remember that on November 2, the Fed will have its next interest rate hike meeting. We need to follow this information closely to prepare for both scenarios of BTC continuing to increase or BTC will turn down.
Europe's winter has begun
Similar to Vietnam, countries in Europe are also starting the winter with forecast to be harsher than last year. Households in Europe are facing rising fuel prices, while personal incomes remain unchanged. This has indirectly reduced the source of new money entering the bottom of the market, even when December is near, which means Christmas and New Year are also approaching. As these occasions approach, people often tend to cashout to get money for home improvements, shopping or simply closing deals for a year. The year 2021 has also seen the market decline in the last days of the year. These factors will significantly affect the overall market situation.
Experts are also warning that the world is about to face a global recession when bank interest rates will continue to increase until inflation is under control.
Money is flowing to layer 2
Coins like Ethereum, Matic, and Optimism are showing very clearly that the money is flowing to layer 2 when the prices of these coins have flown by 20-30% in just 3 days.
According to an onchain source from Data Nerd
About a month ago, The Data Nerd announced that the Longling Capital fund continuously mortgaged a large amount of ETH to borrow Stablecoins and then put it on the floor, the purpose may be to trade short to eat waves.
Yesterday, after ETH pumped nearly 11%, the fund started transferring $6.6 million USDT from Binance to the wallet to repay Compound and received 16K ETH ($25 million).
Through this information, it can be understood that large funds also have a vision of a short-term recovery of the market.
$MATIC is also one of the layer 2 coins that has just had an extremely strong growth. However, today's candle of $MATIC is forming a Bearish Engulfing pattern combined with that after looking at onchain data on Nansen personally writing an article and discovering that there are many shark wallets that have transferred Matic to the exchange for the purpose of having could be profit taking. After tracing the individual who wrote the article, the following data was obtained:
Wallet Address: 0x4f9D2DBccBB5d7733C9E04913afCc4a5D96c3Eb9 (1)
From October 10 to October 21, approximately 2,932,307 $MATIC was received from Coinbase. On October 27, this wallet (1) has transferred all this $MATIC to the wallet address 0xa345beAffdE821f1c633a3285712333e054E949d (2).
And all $MATIC in this wallet (2) was transferred to Coinbase on the same day of October 27. If calculating the price at the time of purchase compared to the price at the time of transferring $MATIC to the floor, this $MATIC amount has made a profit of more than 15%
A wallet address labeled ETH millionaire: 0xD4f60a1a59E93368d265C8Eedb05741e726C6d25 (3)
On October 21, about 384000 $MATIC was transferred from Huobi exchange to wallet (3). Then on October 26, I transferred 500000 $MATIC from my wallet to another wallet address 0x4752A3123c98788ae0C4506B3f8E592025dd7577 (4).
And it is worth noting that this wallet (4) immediately transferred this $MATIC amount to the Huobi exchange right after. If calculating the price at the time of wallet (3) receiving MATIC from Huobi and wallet (4) transferring MATIC back to Huobi, this $MATIC amount has made a profit of more than 17%
In general, the market in the short term will have a rally due to macro factors such as the UK government having a positive view of crypto or the DXY index having corrections. However, in the medium and long term, the writer believes that macro factors have not had much positive support. So it's likely that this will only be a recovery after 2 months of the whole market's decline. When the rally reaches its peak, the price of BTC and the market will again return to its downtrend trajectory.
For layer 2 coins that have pumped strongly following the BTC recovery. The sharks are tending to take profits gradually. Investors can look at this signal and consider for their layer 2 investments.
The information, statements and conjecture contained in this article, including opinions expressed, are based on information sources that Holdstation believes those are reliable. The opinions expressed in this article are personal opinions expressed after careful consideration and based on the best information we have at the writing's time. This article is not and should not be explained as an offer or solicitation to buy/sell any tokens/NFTs.
Holdstation is not responsible for any direct or indirect damages arising from the use of this article content.