AI Weekly Hotspot Report (10.31 - 11.07)

2024-11-07 09:00:38

You are reading the weekly industry hotspot report generated for you by Gate AI Lab. Get a glimpse of the most noteworthy market trends and important events from last week, and receive investment analysis and financial strategies recommendations.

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1. Market Trends

1.1. Market Sentiment

This week, the total Market Cap of Digital Money reached $2.26 trillion, a decrease of 1.22% compared to the previous week. The volume of exchange rose by 28.48% compared to the previous period, reaching $69.98 billion. BTC’s dominance is 60.63%, a pump of 1.44% compared to the previous trading day. Overall, the market sentiment is cautiously optimistic, and the prices of Mainstream Tokens are maintaining a fluctuating upward trend.

The fear and greed index today is 70, with a level of greed. This indicates that the overall market sentiment is relatively optimistic.

Crypto & Tradition Overview as of 13pm UTC+8, Nov 04

1.2. Macro-Economic Impact

Recent global economic data shows that inflationary pressures remain relatively high, but there are signs of some easing. The initial value of the Eurozone’s October CPI on a year-on-year basis is 10.7%, higher than the expected 10.3%, but lower than September’s 9.9%. The October CPI in the United States is 8.2% year-on-year, lower than the previous value of 8.3%, in line with market expectations. Fed officials suggest a high possibility of another 50 basis point rate hike in December, with the median Intrerest Rate expected to be around 5.1% in 2023.

The Producer Price Index (PPI) and Consumer Price Index (CPI) are highly correlated. The Eurozone’s PPI in September was 14.8% year-on-year, a decrease from 24.6% in August. The U.S. PPI in October was 8% year-on-year, lower than the previous value of 8.5%, indicating that inflation pressures are easing. The Purchasing Managers’ Index (PMI) is a leading indicator of macroeconomic trends. In October, the U.S. Manufacturing PMI was 50.4, and the Services PMI was 54.4, both lower than the previous values, indicating a slowdown in economic activity.

Overall, the global economy is slowing down, and although inflation pressures have eased, they remain high. The cryptocurrency market may be affected by macroeconomic uncertainties in the short term, but the long-term prospects are still promising.

1.3 Economic Calendar

Analysis summary:

The October CPI data in the United States is the most important economic data of the week, which will reflect the latest changes in the inflation level in the United States and has an important impact on the monetary policy decisions of the Federal Reserve. The market expects the annual CPI rate to be higher than the previous value.
The focus is also on the US retail sales data in October, which can reflect the spending situation of US consumers. The market expects the retail sales to be higher than the previous value, showing that the economy is maintaining a recovery trend.
In addition, the US October PPI data will provide the latest information on corporate producer prices, helping to assess whether inflationary pressures are easing. Market expectations are for both the annual and monthly PPI rates to be higher than the previous values.

2. Analysis of Fundamentals and Price Fluctuation

2.1. Price Fluctuation Analysis

BTC weekly Volatility
Based on the daily Closing Price of BTC this week, the weekly Volatility of BTC is 2.92%.

Price fluctuations and reasons The price of BTC this week has shown a trend of first rising and then falling. Influenced by the public opinion of the US election and the large inflow of Spot ETF, the BTC price once reached near $73,544, close to a historical high. However, as the weekend approached, there was a pullback in the market, and the BTC price dropped to above $70,000.

volume changes affect
BTC volume this week is relatively active, reflecting market follow-up on the election results on the one hand, and also demonstrating investor recognition of the long-term value of BTC. An increase in volume is conducive to price discovery, but may also exacerbate short-term Fluctuation.

Market Activity and Potential Price Direction Despite the pullback, BTC overall remains bullish. The uncertainty of the election results may continue to affect market sentiment. If Trump wins, BTC may rise further; if Harris wins, BTC is expected to consolidate.

2.2. Analysis of Fundamentals

According to the fund flow data, the main Cryptocurrencies this week showed a net inflow state. Among them, MASK and REN were active, with net inflows of $89.45 million and $10.52 million, respectively. This reflects the strong demand from investors for these two Tokens, indicating that the prices may pump.

Meanwhile, other major tokens such as SOL and FET have also seen varying degrees of net inflows, indicating a high level of market activity. However, some tokens such as STX and FTM have seen a slight net outflow, perhaps indicating investors are taking profits.

Overall, the funding situation has been relatively positive this week, reflecting investors’ optimism towards the crypto market. However, it is still necessary to closely follow the changes in the capital flow of major tokens to evaluate market trends.

On the other hand, the flow of funds from institutional investors is also worth following. Data shows that Grayscale Ethereum Trust ETF ETHE saw a net outflow of $62.42 million this week, while BlackRock Ethereum Trust ETF ETHA saw a net inflow of $65.54 million. This may reflect different perspectives of institutional investors towards Ethereum.

2.3. Smart Money Analysis

The flow of smart money often predicts market trends. According to the latest data analysis, the smart money of BTC and ETH shows different trends.

BTC Smart Money: Data shows that Large Investors’ positions in BTC have increased, indicating that institutional funds are gradually building a position. This means that the support for BTC in the future is relatively strong, and the strength of long positions is dominant.

ETH Smart Money: Unlike BTC, the Large Investors’ position in ETH has decreased, indicating that institutional funds are gradually withdrawing. This suggests that there is significant selling pressure on ETH in the future, with short positions having the advantage.

Overall, smart money in BTC is building a position, while smart money in ETH is pulling back. Therefore, it is expected that BTC will continue to show a volatile upward trend, while ETH may experience a pullback adjustment.

3. Hot Topics

On the eve of the U.S. election, the Crypto Assets market is in a frenzy: the probability of Trump winning is rising, and BTC is rising like a rainbow

Trump’s victory probability soared, will BTC welcome the “Trump bull market”?

Recently, as the 2024 US presidential election approaches, the Crypto Assets market has also become enthusiastic. According to data from prediction market such as Polymarket, the probability of former President Trump winning the election has dropped from 71.5% on July 16 to 59.1%, but still far exceeds Vice President Harris’s 41.8%.

At the same time, the price of BTC also saw a significant pump in October, with a pump of 9.6% in that month, making it one of the best-performing assets after risk adjustment. Analysts believe that this is related to the market’s expectation of a favorable regulatory environment for BTC after Trump’s victory.

Grayscale Research analysts say, “The appreciation of BTC may reflect expectations for a regulatory environment favorable to BTC.”

In fact, Trump has previously stated his support for Bitcoin and Crypto Asset innovation on multiple occasions. If he is re-elected, it is expected that policies favorable to the development of Crypto Assets will be introduced.

“No matter which party is in power, comprehensive bipartisan legislation may be the best long-term solution for the American digital asset industry,” said a Grayscale Research analyst.

Funds pouring into Spot BTC ETF, traders betting on election market

In addition to the pump in the price of BTC, the flow of funds into the Spot BTC ETF is also worth following. Data shows that the net inflow of Spot BTC ETF listed in the United States in October was +$5.3 billion, a new high since February.

Since the launch of SpotBTCETF in January, the net inflow has reached a total of +242 billion US dollars, and the current US ETF holds about 5% of the total BTC supply.

**Grayscale Research believes, “This year’s net inflows into spot ETFs may exert upward pressure on Bitcoin prices.”

However, some analysis also points out that the net inflow of some ETFs may be due to the hedging fund’s paired trading strategy, which involves buying BTC ETFs and simultaneously short-selling BTC futures of equivalent value in USD, aiming to profit from the difference between spot and futures prices.

According to the data of Commodity Futures Trading Commission, since the launch of SpotBTCETF in January, some hedging funds have increased their net short position in BTC futures by nearly $5 billion.

“Of the $24.2 billion net inflows into the SpotBTCETF listed in the US this year, about $5 billion may be paired spot/futures positions, which may not have led to the appreciation of BTC prices,” said Grayscale Research analyst.

The amazing combination of Cryptocurrency and artificial intelligence opens up new development possibilities

In addition to being influenced by the election factors, the cryptocurrency market has recently seen some interesting new phenomena, especially the combination of cryptocurrency and artificial intelligence, which has given new inspiration.

The most notable is the artificial intelligence chatbot Truth Terminal created by researcher Andy Ayrey. This chatbot not only can interact autonomously with other users on the X platform, but also expresses interest in creating Memecoin $GOAT and depositing the new Memecoin into the associated blockchain Address.

**“The Truth Terminal indicates that AI agents can understand economic incentives and can use blockchain to send and receive value,” said Grayscale Research analyst.

At the same time, other innovative projects have also made breakthroughs in the jointly owned artificial intelligence agent. These projects demonstrate that blockchain technology can serve as an effective tool for the future intermediary economic value between humans, artificial intelligence agents, and interconnected physical devices.

“We believe that, compared with traditional payment infrastructure, using permissionless blockchain can be a superior way for AI agents to accumulate and transfer resources,” said Grayscale Research analysts.

Summary

Overall, the US election has brought new opportunities and challenges to the Cryptocurrency market. Trump’s leading position in the hotly contested election has provided new momentum for Bitcoin; at the same time, the combination of Cryptocurrency and artificial intelligence has also opened up new development possibilities.

Looking ahead, regardless of the election results, Cryptocurrency will continue to develop in the United States, perhaps in a way that we can hardly imagine, changing the entire industry. Let’s wait and see.

4. Main Events

The following are the Top 15 significant events that have had a major impact on the Cryptocurrency market in the past seven days, arranged in reverse chronological order:

#Before the US presidential election, funds are being wagered According to reports, on the eve of the US election, investors are betting on a type of non-financial asset, expecting Liquidity to become a driving force for prices. The market expects that the size of the Spot BTC ETF in the United States will double by 2025 and rise fourfold by 2027, and Hong Kong investments in BTC are also worth looking forward to.

#Trump Harris support rate evenly split On November 4, 2024, a poll conducted by the New York Post showed that both Trump and Harris have a support rate of 49%. Compared with previous polls, Harris’s support rate has dropped by 2%. Possibly influenced by this, the memecoin MAGARebound, which is related to Trump, has surged over 30%.

#Polymarket election volume breakthrough On the Decentralization prediction platform Polymarket, the volume of the 2024 US presidential election exceeds $3 billion.

#BTC analyst bullish On November 3, 2024, well-known trader Cryptocurrency Titan Analysis believes that the price of BTC may bottom out near $66,200 and is expected to pump to the $90,000-110,000 range before December.

#Stable CoinMarket Cap is close to its historical high According to DefiLlama data, the total Market Cap of Stable Coins rose by 0.38% in the past week, now standing at $1731.17 billion, approaching the highest level since May 2022.

#ETH is compared to “90s Amazon” On 2024-11-04, an analyst from the encryption asset management company 21Shares stated that Wall Street investors are still not aware of the potential of Ethereum, just like Amazon in the 1990s, Ethereum may also bring revolutionary use cases to us.

#Grayscale: Election Impact on the encryption market Grayscale released a report on November 4, stating that the US presidential election on November 5 may dominate the encryption and TradFi markets in the short term. Regardless of the outcome, Crypto Assets will continue to develop in the United States.

#ARPA Network partners with Bedrock 2024-11-04 Decentralization security computing project ARPA Network has established a strategic partnership with Bedrock to introduce uniBTC into ARPA AVS on EigenLayer.

#Nansen opens up Solana on-chain analysis Blockchain analytics platform Nansen announced that its on-chain analytics feature on Solana is now available to users for free as of November 1, 2024.

#TON Foundation Launches Governance Model On 2024-11-01, the TON Foundation launched the governance model Society DAO to enhance its ecosystem. Its members include TON Core, TON Studio, TON Society, and TelegramWallet.

#Suilend launches sSUIToken Suilend announced the launch of sSUI on November 1, 2024. Compared to other Liquidity stake Tokens, sSUI has instant redemption feature based on SIP-33, eliminating liquidation issues.

#Morph Season 2 Event Coming Soon Morph, a consumer-grade L2 network, announced on X that the first season of activities has ended and the second season is about to be launched on 2024-11-04.

#Lunex Network Presale is hot On November 3, 2024, analysts claimed that one of the best investments for achieving a 100x return in 2025 is Lunex Network, especially with its enhanced instant cross-chain interaction trading feature, which has the potential to become #1 Decentralizationexchange.

#AirDAO advances the Starfleet program AirDAO’s liquid stake platform Harbor’s native governance Token $HBR presale has been launched, marking the continuous progress of the Starfleet program. The presale of Kosmos’ native Token $KOS for the bond market will be launched on December 2nd, 2024.

5. Global Policies

The following is a list of new political dynamics, economic policies or regulations related to the Cryptocurrency industry, as well as the analysis of their impact on the industry and the market, and finally a summary of the title, according to the news from October 28th to November 4th, 2024.

1. 2024 US Presidential Election

Time: November 5th, 2024
Content: The United States will hold the presidential election on November 5, 2024. Whoever is elected may have a significant impact on the Crypto Assets industry.
Impact analysis:
If Trump wins, it is expected that policies favorable to the development of Crypto Assets will be introduced, as he has shown great enthusiasm for Bitcoin and Crypto Assets.
If Harris wins, it is expected to push for comprehensive bipartisan legislation to establish a unified regulatory framework for the digital asset industry in the United States.
Changes in control of the Senate could also affect the appointment of key regulatory agency chairpersons, such as the chairman of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission.

2. The law protecting encryptionMining and self-hosting rights in Oklahoma takes effect

Date: November 1, 2024
Content: The bill signed by Oklahoma will take effect on November 1st, protecting the use of Cryptocurrency in purchases, self-storage rights, prohibiting additional taxes on Cryptocurrency, and recognizing the legitimacy of encryption Mining.
Impact analysis: The bill provides a favorable regulatory environment for Crypto Assets in Oklahoma, which helps promote the development of the state’s Crypto Assets industry.

3. The EU “encryption Asset Market Act” (MiCA) takes effect

Time: December 31, 2024
Content: The EU’s MiCA (Crypto Assets Market Regulations) guidance for cryptocurrency exchanges and other companies operating in the European Union will come into effect from December 31st.
Impact Analysis: MiCA will provide a unified regulatory framework for the Cryptocurrency industry within the European Union, which is beneficial for the development of Cryptocurrency in the EU, but it may also increase Compliance costs.

4. The new guidelines for the European Banking Authority’s encryption assets “travel rules” are in effect

Time: December 30, 2024
Content: The new guidelines for the “Travel Rule” applicable to encryption assets by the European Banking Authority will take effect from December 30, 2024.
Impact Analysis: This guide will provide guidance to EU member state banking institutions in handling Crypto Assets, which will help the Compliance development of Cryptocurrency in the EU.

5. Basel Banking Supervision Committee encryption Asset Risk Disclosure Advisory Opinion

Time: The planned implementation date is January 1, 2025
Content: The Basel Banking Supervision Committee has issued consultation opinions on the disclosure of bank encryption asset risks, proposing that banks disclose their encryption asset risks.
Impact analysis: This opinion helps strengthen banks’ management of encryption asset risks, but it may also increase banks’ compliance costs.

Summary Title: Policies and Regulations

6. Investment Analysis

6.1. Investment Recommendation

Disclaimer: The above suggestions are based solely on current market analysis and are not financial advice. Investment carries risk, so please enter the market cautiously.

6.2 Investment Strategy

Hot Token Analysis

According to Part 3 of the hot topic, this week’s popular tokens include MOODENG, LUCE, GRASS, etc. MOODENG and LUCE, as MemeTokens in the Solana ecosystem, have a significant price fluctuation and require investors to remain highly vigilant. GRASS, as a newly listed token, may have some speculative demand in the short term, but its long-term value needs to be tested over time.

Trading Bot Strategy Analysis

The spot Martingale strategy has performed well, especially in the ZK_USDT and JASMY_USDT markets, with yields of up to 21841.58% and 16241.34%, respectively, which are high-risk and high-yield strategies.
The contract grid strategy has also performed well in markets such as MOODENG_USDT and ZEC_USDT, with yields of 11,303.51% and 11,190.08% respectively. The volatility is high, suitable for investors with a higher risk preference.
The infinite grid strategy performs well in the PEOPLE_USDT market with a yield of 229.91%, and the Fluctuation is relatively mild, with controllable risks.

Recommended Robot Strategies of the Week

Summary

In this week’s robot strategies, the high-risk and high-return Martin Gale and contract grid strategies in Spot performed the best, but investors also need to have sufficient risk awareness. Relatively stable strategies such as infinite grid and smart rebalancing are more suitable for investors with lower risk preferences.

6.3. Financial Management Products

Simple Earn

Simple Earn helps match users with idle assets and borrowing needs. After purchasing Simple Earn, the system will determine whether the borrowing is successful and the Intrerest Rate for that hour based on the user’s set Intrerest Rate and actual borrowing needs at every o’clock. Successful borrowing can earn Interest for that hour. Simple Earn supports user-defined Intrerest Rates, allowing users to set the minimum lending Intrerest Rate when purchasing. After successful borrowing is determined at each hour, the earnings are calculated based on the determined Intrerest Rate. Simple Earn supports flexible deposits and withdrawals, allowing 24-hour access for purchase and redemption, with immediate account crediting upon redemption.

The total amount of USDT in the wealth management of Yubi is 350,193,997.59, and the estimated Annual Percentage Rate is 16.65% + 8.87%.

Financial Management Treasure

The Wealth Management Treasure is a one-stop comprehensive financial service center established by Gate.io Finance, which includes current, fixed, and other all-round financial plans, providing users with hundreds of types of Digital Money financial products.

Structured Financial Products

Gate.io structured financial management is a new financial product based on a combination of fixed income, Options, and other financial Derivatives. Generally, the level of return for Settlement is determined by comparing the price performance of the underlying asset during the investment period with the stipulated trigger price, and can be divided into two types: principal-guaranteed and aggressive. Users can purchase products of specified investment period according to their required yield, Standard Money, etc. In general, the principal and interest are redeemed at Settlement upon maturity, and early redemption is not allowed.

4.市场Intrerest Rate

Note:

TradFi interest rate data comes from Bloomberg Terminal.
CeFi and DeFi interest rate data are sourced from mainstream Cryptocurrency exchange and Decentralization financial platforms respectively.
The above Intrerest Rate data is for reference only, and the actual Intrerest Rate may vary.

Disclaimer: All the content in this report is based on publicly available information and is for reference only. It does not constitute investment advice. Gate.io shall not be liable for any direct or indirect losses resulting from the use of the information in this report.

6.4. Technical Analysis: ETH Bollinger Band Trading Strategy Backtest

Backtest ETH’s historical data according to the Bollinger Bands trading strategy, with initial capital of 100,000 USDT. Sell 20% Position when the ETH price approaches or breaks through the upper band, and buy 20% Position when the ETH price approaches or breaks through the lower band.

Backtest results are as follows:

Final Yield: 36.72%
Maximum Drawdown: 21.35%
Annualized Volatility: 48.26%
Total trading times: 187 times
Number of profitable trades: 102 times
Win rate: 54.55%

Data Analysis:

The strategy performed moderately in the ETH market, with a final return rate of 36.72%, slightly higher than the rise of ETH during the same period.
The maximum drawdown rate reaches 21.35%, and the annualized Volatility is as high as 48.26%, with high risk.
The total number of transactions is high, reaching 187 times, Transaction Cost is relatively high.
The winning rate is 54.55%, slightly higher than 50%, indicating that the strategy has a certain advantage.

Advantages:

Simple and easy to execute strategy operations.
The winning rate is slightly higher than 50%, and it has a certain profit-making ability.

Disadvantages:

The maximum drawdown rate and annualized Volatility are relatively high, with greater risk.
Too many transactions, the Transaction Cost is high.
The yield is generally difficult to outperform the market.

Generally speaking, the strategy has relatively high risk and average return, and is not very suitable for most investors. It is recommended to optimize the strategy by combining other technical indicators and Fundamental Analysis, to reduce risk and increase return.

BTC0,58%

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