The Weekly Report is our summary of key indicators and recent events in the crypto world that professional traders are closely monitoring. This report and other relevant information are first shared via the official League of Traders Telegram channel.

Here are our notes for the fifth week of October!

1. Bitcoin Chart/Ethereum Chart

Bitcoin is currently trading at $67,700, consolidating from $67,200 last week. Since a sharp drop in early August, Bitcoin has been on an upward trajectory, forming higher lows. To maintain this momentum, it will be crucial to hold above $64,000, even in the event of a correction. Should Bitcoin break through the $70,000 mark, it could spark a rally toward new highs. Upward momentum could be further fueled by inflows into Bitcoin spot ETFs, particularly BlackRock’s IBTC.

However, high levels of open contracts in Bitcoin present elevated risk. Combined with a challenging macroeconomic backdrop — including rising U.S. Treasury yields and a strengthening Dollar Index — there is reason for caution around potential corrections.

BTCUSDT Chart (Binance)

Spot Bitcoin ETF flows (The block)

Ethereum’s price softened last week, falling from $2,670 to $2,490. Fund inflows into Ethereum spot ETFs have stalled, and network activity has slowed. Since the launch of the spot ETF, Ethereum’s price movement has been weaker than Bitcoin’s, and a turning point in fund inflows may be needed for the price to regain upward momentum.

ETHUSDT Chart (Binance)

Spot Ethereum ETF flows (The block)

Bitcoin dominance increased from 58.31% to 59.52% last week, driven largely by Ethereum’s relative weakness. Should Bitcoin rally further, its dominance could temporarily exceed 60%.

Bitcoin dominance chart (CoinMarketCap)

2. Major Economic Indicators

• US Bond Yields

Last week, the U.S. 10-year Treasury yield rose sharply from 4.16% to 4.28%, driven by heightened inflation concerns as U.S. inflation indicators exceeded expectations. While the 10-year yield has surged from 3.6% in September to around 4.3%, investment asset prices have managed to remain relatively resilient. However, if yields continue to rise, a major correction in the asset market becomes increasingly likely. Asset prices may only rebound once interest rates begin to decrease, making close monitoring of U.S. bond yield fluctuations essential.

US10YPrice Government Bond Rate (TradingView)

• US Dollar Index

The U.S. Dollar Index also rose from 103.857 to 104.547 last week. This increase reflects a preference for the dollar as a safe-haven asset amid rising Treasury yields and mounting geopolitical tensions in the Middle East. Additionally, market sentiment is factoring in potential dollar strength if former President Trump is re-elected, with expectations that his “America First” policy stance may drive further demand.

US Dollar Index (TradingView)

• US100 (Nasdaq 100)

The US100 index saw a modest increase, moving from 20,190 to 20,470. Tesla experienced a strong rebound on expectations of improved electric vehicle sales, while AI-related stocks like Nvidia continued their upward trajectory, contributing to index growth. Although certain individual stocks show potential for further gains, the index is nearing its previous high of 20,700, indicating an increased likelihood of a correction.

US100 (TradingView)

• Gold Futures

Gold futures prices traded steadily around $2,720 last week, near their all-time high. Despite rising treasury yields, gold prices held firm due to sustained demand for safe assets, though the pace of the upward trend appears to have slowed. Should treasury yields remain elevated, gold prices may also experience a slight correction.

Gold Futures (TradingView)

3. Bitcoin Market Data

• MVRV Z-score

The MVRV Z-Score has dipped from 2.05 to 1.97 this week. Ideally, a sustained position near 2, followed by an uptrend, would signal potential for a robust rally. If this level fails to hold, the market may not enter an overheated phase soon.

• Indicator explanation: The MVRV Z-score measures the difference between Bitcoin’s market capitalization and its realized value, divided by the standard deviation. It serves as an indicator to assess whether Bitcoin’s market capitalization is overvalued or undervalued. A score below 0 suggests that Bitcoin is significantly undervalued, while a score of 6 or higher, as seen during the all-time high (ATH) in 2021, indicates an overheated market.

Bitcoin: MVRV Z-Score(Glassnode)

• aSOPR

The aSOPR has also declined slightly from 1.135 to 1.016 but remains above 1 every week, suggesting that the broader bullish market momentum is still in place.

• SOPR, or Spent Output Profit Ratio, is calculated by dividing the price at which Bitcoin was previously received by the price at the time of transfer. A SOPR below 1 indicates a bearish market, while a value above 1 indicates a bullish market. The aSOPR is an adjusted version that excludes short-term transactions (within one hour), providing a more accurate representation.

Adjusted SOPR (Glassnode)

• Open Interest

Bitcoin perpetual futures open interest has eased from $19.75B to $19.20B, with the estimated leverage ratio also decreasing from 0.209 to 0.207. Both remain elevated, implying that volatility may still arise from potential open interest liquidations. While open interest has not set new highs, its high level warrants caution due to liquidation risks.

Outstanding Open Interests by Exchanges (Glassnode)

Exchanges’ combined estimated leverage ratio (Glassnode)

4. On-chain data

• Exchange inflows and outflows

Bitcoin continues its net outflow trend from exchanges, ongoing since Q3, though the outflow volume has slightly decreased from last week. Despite this minor dip, the sustained movement of funds off exchanges may indicate potential for a future uptrend.

Bitcoin: Exchange Net Position Change (Glassnode)

• Number of Whale Wallets

In contrast, the number of whale wallets holding over 10,000 BTC and those with more than 1,000 BTC declined last week. This reduction suggests that larger holders, or whales, may be realizing profits or rebalancing portfolios in anticipation of a potential market downturn. This activity introduces potential downward pressure on Bitcoin’s price, underscoring the need for caution in the short term.

Number of Bitcoin wallets holding 10K or more (Glassnode)

Number of Bitcoin wallets holding 1K or more (Glassnode)

5. Last Week’s Major News

• League of Traders’ First In-Person Event

Social trading platform League of Traders held its first offline event, League of Traders Night, on October 17th. The gathering allowed community members to network, share insights, and directly engage with representatives from leading exchanges and investment firms, fostering a collaborative environment within the trading community.

• NVIDIA Reclaims Top Market Cap Position:

On October 25th, NVIDIA’s stock rose by 2% on the New York Stock Exchange, temporarily pushing its market cap to $3.53 trillion, reclaiming the position of the most valuable company globally by surpassing Apple (at $3.52 trillion). This surge reflects NVIDIA’s ongoing leadership in the AI chip sector.

• Close Race Between Harris and Trump in Polls

With nine days until the U.S. presidential election, Democratic candidate Kamala Harris has edged ahead of Republican candidate Donald Trump by 1–2 percent points. According to an ABC News/Ipsos poll conducted from October 18–22, Harris has a 49% support rate among registered voters, leading Trump by 2 points, a margin within the poll’s 2% margin of error.

6. Major economic events

Major economic events last week

New jobless claims decreased, the PMI increased, and home sales saw an uptick. These positive economic indicators suggest that inflation remains a concern, leading to an increase in the U.S. 10-year Treasury yield. If inflation remains unchecked, prolonged high interest rates could re-emerge as a market focus, impacting investment sentiment and asset valuations.

Major Economic Events for the 4th week of October 2024 (Investing.com)

This week’s major economic events

This week’s employment report will be watched closely. Strong job numbers could fuel inflation worries, potentially prompting a “Good is Bad” reaction where good employment data increases the risk of further rate hikes. Conversely, weaker employment figures might ease concerns about rate hikes and could influence the markets positively.

Major Economic Events for the 5th week of October 2024 (Investing.com)

Summary

• Positive: Bitcoin spot ETF fund inflows, Nasdaq 100 index performance, exchange inflow/outflow trends, and aSOPR showing continued positive trends.

• Negative: Rising U.S. bond yields, a stronger U.S. dollar index, high open contracts in Bitcoin, and a decreasing number of whale wallets indicate increasing risk and volatility.

Market Outlook: Despite favorable inflows into Bitcoin ETFs and a positive aSOPR indicator, caution is warranted due to macroeconomic pressures like high bond yields and a stronger dollar. With open contracts reaching significant levels, resolving these could introduce volatility. Investors should pay attention to macroeconomic events and follow market trends, especially as Bitcoin approaches potential all-time highs, which may signal either a breakout or a pullback.