Fundamental analysis

Crypto market gives positive signals for growth

For almost all of October, Bitcoin and Ethereum moved in a characteristic lateral amplitude, which became a kind of prerequisite that there may be a change in trading interests in the market.

It is worth noting that in the same period of time, US stock indices initially showed an active downward trend, which led to updates of local low of the downward cycle from mid-August. In this case, there is an interesting phenomenon that cryptocurrencies have been declining more slowly than the stock market. Do not rejoice prematurely, cryptocurrencies collapsed in vain early in the period of August and September.

Change of trading interests

Here things are like this, the US stock indices slowed down the decline around October 12–13, after which a characteristic reversal occurred. As a result, the average growth of the index from the local low was about 10%.

In this case, riskier assets, in our case, cryptocurrencies, played with a delay of about one week. We will analyze the details of the growth of BTC and ETH a little later.

What is the reason for the change in trade interests?

To a greater extent, this is due to the hopes of investors that the Fed will give the market positive signals that they will slow down the rate of increase in the refinancing rate at the November 2 meeting. There is also a growing speculation among economic experts that regulators won’t last long without a printing press. Perhaps as early as 2023 we will see a quantitative easing program again.

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What happens on the trading charts of Bitcoin and Ethereum?

General picture of the market:

• 130 days without updating the low of the downward trend of BTC and ETH

• 348 days of global downward trend in the cryptocurrency market

• 14% growth in BTC from the local low on October 13

• 30% increase in ETH from the local low on October 13th

• +13 points added Crypto Fear & Greed Index from relative stagnation in October

• +$113 billion to capitalization from the local low on October 13

Bitcoin Growth Details

Although the downward trend ended around October 13, this value is $18,130, the main upward movement appeared only from October 25. On this day, the first cryptocurrency strengthened in value by 3.9%, setting the pace for buyers. On October 26, the upward cycle was extended to new levels, as a result of which the stagnation in October completed its formation, and the quote again turned out to be above the psychological level of $20,000.

Whether this local upward trend will signal the end of the downward trend, time will tell. While it is too early to draw such conclusions, recall that back in mid-August, the quote already gave hope for a change in trend, but everything ended not in the best way.

Now it is worth closely monitoring the monetary policy of the leading economies, as they will indicate the subsequent path of financial markets.

Ethereum Growth Details

The second largest cryptocurrency, Ethereum, has had similar cycles. On October 13, the local low of October at $1,190 was marked, and on October 25, the main jump in the activity of long positions appeared. As a result, the ETH quote strengthened in value by 8.64% in just a day. After that, the growth continued, where the stagnation of October was left behind, and the quote confidently overcame the level of $1,500.

Expectations for Bitcoin and Ethereum

As has been said many times, everything will depend on the policy of central banks, in particular, it is worth paying special attention to the Fed meetings in November and December. Perhaps bullish signals will appear soon.

Outlook

Based on a favorable forecast, Bitcoin growth may accelerate. The first benchmark is the $25,000 level area. In the event of its breakdown, the quote may well rush to $30,000 and possibly even higher. This will be the very long-awaited moment of the trend change.

For Ethereum, everything is similar, if the first cryptocurrency grows, then the entire crypto market will move to growth.

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The material has been provided by InstaForex Company – www.instaforex.com


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