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Despite the current market performance being sluggish, there have been positive institutional buying signals. Fidelity reported on October 16th that it had purchased Ethereum worth approximately $154.6 million, indicating long-term institutional confidence that may help reduce market selling pressure.
The supply of Ethereum on the exchange is continuously decreasing, reaching a low point since May last year. This usually means that investors are more inclined to transfer assets to private wallets for long-term storage, indicating potential supply tightening.
At present, the confidential currency market is influenced by multiple important factors such as macro policies, unexpected events, and technical aspects
1、 Macro and Regulatory
1. Enhanced expectations of Federal Reserve easing (potential positive): Market expectations for the Fed's interest rate cuts have risen, and it is expected that there may be 2-3 interest rate cuts in 2025. This loose liquidity environment typically creates favorable conditions for risk assets such as cryptocurrencies.
2. Continued US government shutdown (uncertainty): The shutdown status may result in delayed release of multiple economic reports, including September inflation data. This exacerbates market uncertainty, causing investors to tend to stay on the sidelines.
3. The Chairman of the US Securities and Exchange Commission (SEC) has stated that cryptocurrency and tokenization are "top priorities" and mentioned considering establishing an "innovation exemption" mechanism. This sends a signal of seeking compliant development rather than blindly suppressing, which is crucial for the long-term healthy development of the market.
2、 Market situation
1. Bitcoin and gold show strong correlation: Some analysts believe that Bitcoin may catch up with the rise of gold. The narrative of Bitcoin as a value storage tool provides support.
2. Mainstream cryptocurrencies have generally experienced a pullback: Ethereum prices are around $4000, while mainstream tokens such as SOL and XRP have also shown varying degrees of volatility, with little decline. This indicates that overall risk appetite has decreased in the face of macro uncertainty.
Summary: The expectation of macro interest rate cuts and the SEC's statement seeking to build a regulatory framework provide long-term support for the market. The US government shutdown has brought a lot of uncertainty. So in the current news perspective, it belongs to the interweaving of long and short positions.
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Disclaimer: The above content only represents the author's personal opinion and is intended to assist investors in understanding information related to the capital market. It does not constitute any investment advice and does not represent the position or viewpoint of AiCoin. The market is risky and investments should be made with caution.