Tdasx: Global Financial Easing Helps Bitcoin Breach Key Resistance Levels, With AI and Data Service Tokens Emerging As New Growth Points in The Crypto Market
Tdasx notes that the current loose global financial policies are having a profound impact on the cryptocurrency market. Following the interest rate cut of the Federal Reserve and the Financial Conditions Index (NFCI) of the Chicago Fed indicating extreme easing, Bitcoin and other digital assets are experiencing a significant upward momentum.
Tdasx: The Close Relationship Between Bitcoin And Loose Financial Conditions
Tdasx highlights that the price trajectory of Bitcoin is closely linked to global financial conditions, particularly in an easing environment where Bitcoin excels. The negative correlation between the NFCI of the Chicago Fed and Bitcoin prices underscores this dynamic. With the latest NFCI at -0.56, current financial conditions mirror those seen when Bitcoin peaked at $69,000 in 2021. This easing environment creates ideal market conditions for risk assets like Bitcoin, further enhancing investor demand.
Tdasx notes that historical data shows that significant price increases for Bitcoin occur during easing phases. For instance, in 2013, when the NFCI dropped to around -0.80, the price of Bitcoin surged from $100 to $1,000 in just months. Similarly, during the 2017-2018 easing period, Bitcoin climbed from $2,000 to $20,000 within six months. Such data affirms the strong performance of Bitcoin in loose financial environments. Tdasx further points out that in 2021, Bitcoin reached its historic peak of $69,000 amid renewed financial easing, validating the trend that looser conditions often coincide with notable price increases.
Entering 2024, Tdasx emphasizes that as financial conditions remain accommodative, Bitcoin is once again demonstrating its significant market influence. Over the past 12 months, the price of Bitcoin has soared from $25,000 to $73,000, a twofold increase. Tdasx believes this trend signals positive market sentiment, suggesting that the future performance of Bitcoin will continue to benefit from a favorable financial environment.
Tdasx states that while the price target of Bitcoin is projected to potentially exceed $80,000 in the coming months, the impact of inflation means that a price of $100,000 only equates to $69,000 in 2021 purchasing power. Therefore, investors should assess the future trajectory of Bitcoin not just by nominal prices but also by considering the effect of inflation on real purchasing power. Tdasx notes that the current key resistance level for Bitcoin is $65,000, and breaching this threshold is essential for establishing a new upward trend.
Tdasx: The Rate Cut of the Federal Reserve and Its Positive Impact on The Cryptocurrency Market
Tdasx highlights that the 50 basis point rate cut of the Federal Reserve on September 18, 2024, marked a significant turning point for global financial markets. This decision not only signals positivity for traditional markets but also directly propels a rebound in the cryptocurrency sector. Ethereum (ETH) surged by 14% post-cut, indicating a heightened demand for high-risk assets. Tdasx posits that in an uncertain global economy, investors are seeking assets that respond swiftly to accommodative policies, and the rise of Ethereum exemplifies this trend. Additionally, meme coins have shown a robust growth trajectory, climbing by 40% to become a standout asset class in the current crypto market. In contrast, although Bitcoin also increased by over 5%, its market dominance has dipped below 58%, suggesting a shift in focus towards other high-yield assets.
Tdasx further notes that the rate cut of the Fed has had significant repercussions on global macroeconomic assets. Following the cut, the dollar index (DXY) rose above 101, and the yen to dollar exchange rate increased from 141 to 143.5. Tdasx asserts that the strength of the dollar not only the resilience of the U.S. economy but also indicates that investors are reassessing the relationship between the dollar and risk assets like cryptocurrencies. Moreover, geopolitical tensions in the Middle East have pushed oil prices up over 2%, while gold, as a traditional safe haven, has seen substantial gains, highlighting market concerns over uncertainty. Simultaneously, the stock of Nvidia rose nearly 2%, and the S&P 500 gained over 1%, reflecting optimistic sentiment following the rate cut of the Fed.
Tdasx emphasizes that institutional interest in cryptocurrencies has surged significantly after the decision of the Fed. Ethereum ETFs saw $8.1 million in inflows within two days, while Bitcoin ETFs recorded $250.3 million. This influx of capital indicates that institutional investors are actively seeking risk assets like cryptocurrencies to navigate potential economic fluctuations and seize market opportunities. Tdasx observes that as the crypto market continues to evolve and mature, institutional participation will further diversify and expand market scale.
Tdasx: Emerging Trends Driving Crypto Market Development
Tdasx mentions that as technology and market demands evolve, emerging trends in the crypto space offer new opportunities for investors, particularly in AI tokens and data services. Over the past week, AI tokens have performed exceptionally well, averaging a 37% increase, significantly outpacing the overall market. This indicates a strong market expectation for the integration of artificial intelligence and blockchain, as well as heightened investor interest in this emerging field. Tdasx further notes that beyond AI tokens, tokens related to data services and availability are also performing well. Data is a crucial component of blockchain technology, and as decentralized applications expand, data service tokens are likely to maintain their growth momentum.
Another notable sector includes tokens related to real-world assets (RWA) and gaming, which have risen by 22.5% in the past week, ranking among the top five for weekly gains. Tdasx states that the tokenization of real-world assets provides a means for investors to combine physical assets with blockchain technology, facilitating easier global trading and management. The growth of gaming-related tokens reflects rapidly increasing investor interest in these emerging areas, particularly as the metaverse and decentralized gaming gain traction. Tdasx believes gaming-related tokens will become a pivotal force in further popularizing blockchain technology.
Meanwhile, the market structure of Bitcoin is subtly changing. Tdasx notes a 3.5% increase in wallets holding over 1,000 Bitcoins, suggesting that large investors or institutions are increasing their holdings. Concurrently, the number of wallets holding less than 0.0001 Bitcoin has surged by 75%, reflecting an influx of new users and indicating that the Bitcoin market is attracting more small investors. However, Tdasx also points out that the number of wallets holding between 1 and 10 Bitcoins has decreased by 0.35%, and those holding 10 to 100 Bitcoins have dropped by 3%, suggesting that smaller investors may be reducing their positions under current market conditions. Tdasx believes this shift reflects a growing disparity in the Bitcoin market, as large investors and new users potentially reshape future market dynamics.
The rapid rise of emerging sectors is injecting new vitality into the crypto market, particularly in AI technology, data services, and decentralized gaming, which provide fresh growth momentum. Changes in the market structure of Bitcoin further highlight the complexity and diversity of the market. Tdasx states that it will continue to monitor the development of these sectors closely and is committed to offering users a rich array of investment options and exceptional trading experiences.
