BitMEX Alpha: Weekly Trader Report (10.25-11.1)

Original author: BitMEX

Too long to read:

• Bitcoin reached an all-time high but pulled back to around $70,000, and its market dominance continued to rise to 60%.

• This week has been particularly exciting for Dogecoin, with its price surging by more than 15%, largely due to public endorsements of the Government Efficiency Sector from high-profile figures such as Elon Musk and Donald Trump. Dogecoins price gains have further expanded as Trumps probability of winning the upcoming election rose to 67% on Polymarket, with just one week left until Election Day.

• We explore the latest developments in Bitcoin as it continues to reach new highs in market dominance in the cryptocurrency market.

Data Overview

Good Coin

• $DOGE (+14.4%): Dogecoin was the best performer as it followed political trends and echoed Musk’s “Department of Government Efficiency” plan

• $SUI (+3.2%): Sui continues to be strong, surprising many

• $POPCAT (+2.7%): Popcat continues to impress this cycle, becoming the new top meme coin

Bad Coins:

• $MEW (-14%): What goes up, comes down fast, right? MEW was the best performing coin last week

• $TIA (-19.8%): Tia faces massive unlocking and its fundamentals are questioned as the protocol cannot generate fees

• $NEAR (-14.1%): NEAR’s decline may come from the fact that AI stocks are also under pressure

News Flash

Macro:

• ETH ETF weekly net outflow: +$23.9 million ( source )

• BTC ETF weekly net outflow: +$2.27 billion ( source )

• Initial jobless claims in the US were 216,000 for the week ending October 26 ( source )

• US poll: Harris leads Trump by a narrow 1% margin ( source )

• Mt. Gox address transferred 500 BTC after a gap of 2 months, worth about 35.04 million US dollars ( source )

• MicroStrategy works its stock market magic and launches a massive plan to buy more Bitcoin ( source )

project

• VanEck invests in Web3 gaming startup Gunzilla Games ( Source )

• Sol Strategies, a Canadian listed company, increased its holdings of 12,389 SOL shares ( Source )

• Vitalik praises the performance breakthrough of Polygon’s ZK proof system Plonky 3 ( source )

• 92.3 million TIA tokens enter circulation, with potential selling pressure of $460 million ( source )

• Blockchain solar company Glow raises $30 million from Framework and Union Square Ventures ( Source )

Trading Insights

NOTE: The following should not be considered financial advice. This is a compilation of market news and we always encourage you to do your own research (DYOR) before executing any trades. The following is not meant to guarantee any returns and BitMEX cannot be held responsible if your trades do not perform as expected.

Irreplaceable: Bitcoin’s fundamental advantage

Bitcoin remains the best trade in this cycle, especially for institutional-scale trading. In this article, we will analyze Bitcoins current market position and explore the factors that influence whether to go long or short. We will look at fundamental demand drivers, current market dynamics, and potential risks in an attempt to provide a comprehensive overview of Bitcoins appeal in the cryptocurrency market.

Traditional financial inflows are much stronger than ETH:

Bitcoin is gaining favor among institutional investors, a trend evident in recent ETF inflow data. The record inflows into BTC ETFs over the past two days coincided with Bitcoin’s attempt to break through all-time highs, indicating that traditional financial investors are confident in Bitcoin’s potential to break through its historical price ceiling. Notably, the funding rate for BTC futures has not seen a significant increase, suggesting that hedge funds have not yet engaged in basis arbitrage on a large scale. This suggests that it is mainly ordinary investors rather than arbitrageurs who are driving inflows—a strong sign that market sentiment is leaning toward Bitcoin’s growth potential.

While Bitcoin ETFs have seen massive inflows, Ethereum (ETH) has seen only about 1% of Bitcoin’s inflows, despite ETH’s market cap being about 21% of BTC’s. This disparity highlights Bitcoin’s unique appeal to traditional finance, which could drive its long-term dominance over other alternative coins.

Listed companies’ holdings and market support

Public companies, led by MicroStrategy and its CEO Michael Saylor, continue to show strong support for Bitcoin. MicroStrategys stock premium soared to a new high of 166% last Friday, reflecting strong investor confidence. The companys recent $42 billion allocation of funds for Bitcoin purchases highlights its long-term commitment. Their vision is clear: to develop into a Bitcoin bank and provide Bitcoin-backed products to institutional investors. Meanwhile, Microsofts upcoming shareholder meeting will consider investing in Bitcoin, which may mark the entry of another major player into the market. This is reminiscent of Teslas purchase of Bitcoin in early 2021, which triggered a 40% price surge in a few weeks. Although Microsofts participation has not yet been confirmed, it is triggering similar market excitement and expectations.

Is Now the Time to Buy Bitcoin?

The historical dynamics of Rising October

October has typically marked the start of major rallies in past Bitcoin bull cycles. If historical trends continue, we could see further explosive gains. Market momentum has already pushed Bitcoin higher, and carrying this strength into November could push BTC higher even further.

Potential impact of US election volatility

The upcoming US election adds another layer of complexity. While a crypto-friendly government may sound favorable, major policy shifts or economic restructuring plans under the new administration could introduce higher volatility. Regardless of which candidate is viewed as more crypto-friendly, the associated financial uncertainty could impact the cryptocurrency market, making it imperative for investors to be prepared for rapid volatility. The possibility that Elon Musk could participate in a government efficiency commission could trigger drastic economic policy changes. Investors should consider the risks that these changes could bring to financial markets, potentially increasing Bitcoin volatility.

Bitcoin in Bhutan

Bhutan’s recent deposit of approximately 1,000 BTC ($65 million) into Binance has sparked speculation about a potential sale. While it is unclear whether the Bhutanese government intends to liquidate its Bitcoin holdings, a large-scale sale could put downward pressure on prices. Investors should monitor this as a potential risk factor for Bitcoin price stability.

in conclusion

While the long-term outlook for Bitcoin remains positive, upcoming elections and macroeconomic factors may require a cautious approach. For those inclined to maintain a bullish stance, swing trading may allow for profit while still taking advantage of Bitcoins upside potential. With expected volatility increasing, strategic positioning can allow investors to maximize gains while managing downside risk.

This article is sourced from the internet: BitMEX Alpha: Weekly Trader Report (10.25-11.1)

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