Daily News | Altcoins Generally Fell by More Than 20%, Bitcoin Is Still Bullish in the Medium Term

Crypto Daily Digest: Both BTC ETF and ETH ETF saw significant inflows, leading to a cooling of the market

According to Farside Investor data, yesterday’s net inflow from the US spot BTC ETF was $480 million. BlackRock’s IBIT inflow was $398 million, and Fidelity’s FBTC net inflow was $175 million.

Yesterday, the US Ethereum spot ETF received $150 million in inflows. BlackRock’s ETHA inflow was $155 million, and Fidelity’s FETH net inflow was $30 million.

Altcoins generally fell by more than 20%, the mainstream CEX futures funding rates cooled down across the board

According to Gate.io market data, as Bitcoin falls and reaches $94,000, Altcoins are experiencing an extreme trend of widespread decline, with:

-Ethereum hit a low of $3,509 and is now trading at $3,706, a 7.15% drop in 24 hours

-SOL hit a low of $203 and is now trading at $218, a 7.35% drop in 24 hours

-SAGA reached a low of $1.8 and then rose to $2.67, and is now trading at $2.09, a 24% drop in 24 hours

-1INCH hit a low of $0.4 and is now trading at $0.477, a 23.6% drop in 24 hours

According to Coinglass data, after this sharp drop and extreme market conditions, the funding rates of mainstream CEX futures have experienced a “cooling” across the board, and have now returned to normal levels. The vast majority of Altcoin futures funding rates have fallen below 0.005%, entering a “generally bearish” level. Some Altcoin futures rates have even experienced negative rates on some CEX.

Viewpoint: Bitcoin is still bullish in the medium term, provided that ETFs continue to maintain inflows

The report states that “Bitcoin broke through $100,000 last week, reaching a historic high of $104,000. This marks a 111% increase in Bitcoin since its summer low of less than $50,000. However, this uptrend was followed by a sharp 14.84% pullback, including a rapid 10% drop in just 8 minutes - the largest pullback since a historic high and comparable to the sell-off before the US presidential election. This pullback triggered a strong consolidation of over $1.1 billion, with $419 million in Bitcoin long positions, highlighting the leverage level in the market.

Nevertheless, signs of market stability are still emerging. The realized profit target once reached its peak at a daily average of $10.5 billion, but now it has dropped to $2.5 billion, easing selling pressure. The futures financing rate has also returned to normal, indicating a decrease in speculative leverage. Although ETF inflows slowed down over the weekend, they remain a key source of support for the market, especially in the context of long-term holders taking profits.

With Bitcoin consolidating around $100,000, the medium-term outlook remains bullish, and further upward momentum is possible as funding rates normalize and selling pressure slows, provided that ETFs continue to maintain a state of capital inflows.”

Morgan Stanley: Expected Fed to cut interest rates by 25 basis points in December and January next year respectively

The team led by Morgan Stanley strategist Matthew Hornbach stated in a report: “We believe investors should be prepared for a higher market implied probability of a 25 basis point rate cut at the Federal Open Market Committee (FOMC) meeting on January 29 next year.”

The recommended approach includes buying federal funds futures that expire in February next year, which can yield the overnight index swap rate for the January meeting next year. Although economists at Morgan Stanley predict that the Federal Reserve will cut interest rates by 25 basis points in December and January next year, investors still have doubts.

Market Trends: Altcoins generally fell sharply, while MOVE’s online performance was impressive

Market Hotspots

The new coin MOVE performed well on Gate.io, with a current circulating market cap of $1.66 billion, which is close to the market cap of trending Layer2 projects ARB and OP. MOVE is currently the third largest Ethereum Layer2 project in terms of market cap;

The price of Meme coin BABYDOGE remained strong, recovering from the sharp decline early this morning; BABYDOGE is a dog meme on BNB Chain with a current circulating market cap of $900 million.

Mainstream Coins

BTC briefly reached $94,150 early this morning and has now rebounded to around $98,000. BTC prices remain strong, with BTCD rebounding to 55.7%;

ETH rebounded after plummeting to around $3,500 and is currently consolidating around $3,750. The ETH ETF has achieved net inflows daily for two consecutive weeks;

Altcoins generally fell sharply, and a pullback in Altcoins is inevitable. Trending coins such as GOAT and MOODENG once accounted for over 30% of the market share.

Macro news: US stocks collectively closed lower, Morgan Stanley expects Fed to cut interest rates for two consecutive months

The three major indexes of the US stock market collectively closed down, with the S&P 500 index falling 0.61% to 6,052.85 points; The Dow Jones Industrial Average fell 0.54% to 44,401.93 points; The Nasdaq index fell 0.62% to 19,736.69 points. The benchmark 10-year Treasury yield is 4.20%, while the 2-year Treasury yield, which is most sensitive to the Federal Reserve policy rate, is 4.13%.

Morgan Stanley economists expect the Federal Reserve to cut interest rates by 25 basis points in December and January next year, but investors still have doubts. The overnight index swap (OIS) market priced the easing rate decided by the Federal Reserve on December 18th at approximately 20 basis points, with an 80% probability of a rate cut. In contrast, before the November employment data released last Friday triggered market bets on the Fed’s interest rate cut this month, the probability was about 64%. This week, the market may price the Federal Reserve’s interest rate cuts in December and January more fully, with potential catalysts including the November Consumer Price Index (CPI) and Producer Price Index (PPI) reports released on Wednesday and Thursday.