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 first week of November!

1. Bitcoin Chart/Ethereum Chart

Last week, Bitcoin’s price rise, topping out at $73,620 on Binance, raised hopes of surpassing its all-time high of $73,777. However, the combination of increasing U.S. bond yields and recent declines in former President Trump’s election chances exerted downward pressure, bringing Bitcoin to its current level near $69,000.

A key driver in Bitcoin’s recent rally has been significant fund inflows into Bitcoin spot ETFs, particularly from BlackRock’s IBTC fund. Data from SoSo Value shows that on October 29 alone, daily net inflows into Bitcoin ETFs totaled $870 million, marking it as the third-largest daily inflow on record. BlackRock’s IBTC fund notably contributed $643 million of this amount. Historical data also shows previous record-setting days for Bitcoin ETF inflows, with $1.05 billion on March 12 and $887 million on June 4. So far, October has reached a cumulative inflow of $4.42 billion, the highest since March this year.

While Bitcoin’s high open interest in futures markets initially supported its price rise, the current level remains elevated, which may amplify price volatility. This is especially relevant with the added uncertainty around the upcoming U.S. presidential election, a factor that could trigger significant fluctuations depending on market reactions to political developments.

BTCUSDT Chart (Binance)

Spot Bitcoin ETF flows (The block)

Ethereum has been relatively weak compared to Bitcoin over the past week, declining from $2,490 to $2,468 following a short-lived rebound. Unlike Bitcoin, which has seen significant inflows into spot ETFs, Ethereum’s fund flows in ETFs remain stagnant. This limited movement in capital has kept Ethereum’s price from gaining traction, and the trend appears to be flat for now, which raises concerns about further declines if the outflow trend continues.

Competing layer one networks like Solana, TON Network, and SUI are also absorbing market share, creating additional pressure on Ethereum. Technically, Ethereum’s price is currently in a consolidation phase, showing some signs of potential recovery. However, if fresh fund inflows do not materialize, particularly into Ethereum spot ETFs, there is a risk that prices could break below current support levels, possibly leading to further declines.

Ethereum’s near-term outlook will likely depend on whether it can attract investor interest or remain sidelined in the shadow of Bitcoin’s rally.

ETHUSDT Chart (Binance)

Spot Ethereum ETF flows (The block)

Bitcoin dominance has increased to 60.46%, up from 59.52% last week, reflecting Bitcoin’s continued strength and investor preference amid market uncertainty. This increase in dominance signifies a shift in market capital primarily into Bitcoin rather than altcoins, which have shown relative underperformance. A high Bitcoin dominance often signals that investors view Bitcoin as a safer asset, especially in uncertain macroeconomic conditions, such as rising U.S. Treasury yields and a strong dollar.

Bitcoin dominance chart (CoinMarketCap)

2. Major Economic Indicators

• US Bond Yields

The recent rise in the U.S. 10-year Treasury yield, which increased from 4.28% to 4.38% over the past week, highlights the market’s sensitivity to inflation-related indicators and strong economic data. Employment and macroeconomic indicators exceeding expectations are sustaining inflation worries, which have pushed bond yields significantly higher — from around 3.6% in September to over 4.3% now.

US10YPrice Government Bond Rate (TradingView)

• US Dollar Index

The U.S. dollar index fell last week, moving from 104.547 to 103.775, despite an increase in U.S. bond yields. This decoupling suggests a shift in investor sentiment around the dollar, which had previously been strong amid expectations of higher U.S. yields. Analysts attribute the decline to several factors, including the reduced likelihood of Donald Trump winning the next presidential election, which dampens the “America First” policy stance that tends to bolster dollar strength.

US Dollar Index (TradingView)

• US100 (Nasdaq 100)

The US100 index (Nasdaq 100) experienced a decline last week, moving from 20,470 to 20,100. This adjustment was influenced by rising U.S. Treasury yields, which often make risk assets like tech stocks less attractive as investors seek safer returns from bonds. Additionally, the uncertainty surrounding the upcoming U.S. presidential election has caused many investors to adopt a cautious, wait-and-see approach, reducing their positions in high-growth sectors in favor of defensive strategies.

US100 (TradingView)

• Gold Futures

Gold futures prices rose to $2,800 per ounce last week, approaching their all-time high, before slightly retreating to $2,738. Despite the upward pressure on U.S. Treasury yields, which would traditionally pull gold prices down by increasing the appeal of interest-bearing assets, gold has remained relatively strong. This resilience in gold prices likely reflects its status as a preferred safe asset amid uncertainty surrounding the U.S. presidential election and ongoing global risks.

Gold Futures (TradingView)

3. Bitcoin Market Data

• MVRV Z-score

The MVRV Z-Score has seen a slight pullback to 1.99, down from last week’s peak at 2.23, where it briefly rose above the crucial 2.0 level. Hovering around 2, this score suggests that Bitcoin is at a pivotal point. If the MVRV-Z Score stays above this threshold and moves into a sustained uptrend, it could support a potential rally, and the market could move toward an overheated phase, which historically aligns with bullish price action and possible new highs.

• 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 (Adjusted Spent Output Profit Ratio) indicator has seen a minor decline from 1.016 to 1.010 this week. Despite this slight decrease, the fact that it remains above 1 suggests that the prevailing uptrend in Bitcoin is still intact. This metric indicates that, on average, Bitcoin holders are still realizing profits on their sales, which is a positive sign for bullish sentiment in the market.

• 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

The open interest in Bitcoin perpetual futures has recently seen significant fluctuations. After reaching an all-time high of $21.81 billion, it has now adjusted slightly lower to approximately $19.64 billion. Despite this recent decrease, the open interest remains at a notably high level, indicating potential risk in the market leverage ratio, which also increased from 0.207 to a near-record level of 0.220 before falling back to 0.206. High levels of both open interest and leverage ratios are often indicative of increased volatility, meaning that traders should exercise caution in their positions.

Outstanding Open Interests by Exchanges (Glassnode)

Exchanges’ combined estimated leverage ratio (Glassnode)

4. On-chain data

• Exchange inflows and outflows

Bitcoin has continued to exhibit a net outflow trend from exchanges since the third quarter, with the outflow volume increasing compared to previous weeks. This consistent outflow of Bitcoin typically indicates a bullish sentiment, as funds moving off exchanges often suggest that investors are holding onto their assets rather than selling. Historically, such trends have correlated with price increases, making it reasonable to expect a potential rise in Bitcoin prices as the year progresses.

Bitcoin: Exchange Net Position Change(Glassnode)

• Number of Whale Wallets

Last week, there was a notable decrease in the number of whale wallets holding over 10,000 BTC, as well as wallets with more than 1,000 BTC. This trend suggests that large holders may be liquidating some of their assets as a precautionary measure ahead of the upcoming U.S. presidential election. Such actions can create downward pressure on the market, particularly in the short term, as these significant sell-offs may influence overall market sentiment.

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

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

5. Last Week’s Major News

• Korea’s MZ Generation Seeks Economic Freedom Through Social Trading

Korea’s younger generation is increasingly seeking economic freedom through social trading platforms like League of Traders. This shift comes in the wake of economic challenges such as soaring real estate prices, youth poverty, and low homeownership rates. Young people are exploring various avenues to boost their income, including part-time jobs, becoming micro-influencers, and engaging in YouTube activities. Many are particularly motivated by job insecurity and rising credit card debt, prompting even full-time workers to seek additional income sources. As a result, virtual asset investments and social trading are gaining popularity as viable alternatives for financial growth among this demographic.

• Robinhood, 3rd quarter virtual asset trading volume of $14.4 billion,⋯ 114%↑ compared to last year

According to Robinhood’s third-quarter report released on October 30, 2024, the platform recorded a virtual asset trading volume of $14.4 billion, marking a 114% increase compared to the same period last year. However, this represents a 33% decrease from the previous quarter. The company also reported a 165% year-on-year increase in virtual asset trading revenue, amounting to $61 million. Additionally, assets under custody (AUC) rose 76% to $152.2 billion, driven by increased net deposits and the value of stocks and virtual assets held by users. These figures highlight Robinhood’s continued growth in the virtual asset sector despite some quarterly fluctuations.

• CZ makes first public appearance after release⋯ : “I do not plan to operate an exchange for the time being.”

Zhao Changpeng, also known as CZ, made his first public appearance since his release from U.S. federal prison at the Binance Blockchain Week on October 31. His prison term, which lasted four months, was a consequence of violating the U.S. Bank Secrecy Act. During the event, CZ shared insights about his future endeavors, emphasizing that he is focusing on the educational platform Giggle Academy, which he announced last year. He intends to dedicate more than half of his time to this initiative, aiming to provide digital education services for those with limited access to traditional education.

6. Major economic events

Major economic events last week

The U.S. job market is demonstrating robust strength, with nonfarm payrolls increasing significantly beyond expectations and a decrease in unemployment claims, even as inflation persists. The personal consumption expenditures (PCE) index has also surpassed forecasts, leading to diminished expectations for interest rate cuts. As a result, interest rates in the U.S. bond market are on the rise, which negatively impacts asset prices. This environment suggests that a policy shift, or pivot, may be necessary.

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

This week’s major economic events

This week, the U.S. presidential election stands out as a major event. Given ongoing inflation concerns, market participants are closely monitoring how the election results might influence market sentiment. Regardless of the outcome, heightened volatility is anticipated, particularly if Democratic candidate Kamala Harris is elected, as it could intensify temporary downward pressure on markets.

Major Economic Events for the 1st week of November 2024 (Investing.com)

Summary

• Positive Indicators:

• U.S. dollar index is strengthening.

• Significant inflows into Bitcoin spot ETFs.

• MVRV Z-score and aSOPR indicate favorable conditions for Bitcoin.

• Positive exchange inflows and outflows.

Negative Indicators:

• Rising U.S. bond yields.

• Increased outstanding commitments.

• A decline in the number of whale wallets.

Market Outlook: Bitcoin appears to be positioned within a bull market according to intrinsic metrics. However, with the ongoing inflationary pressure in the U.S. and the uncertainty surrounding the presidential election, increased volatility is likely in the investment landscape, including virtual assets. Should President Trump defy public opinion polls and secure re-election, it could potentially catalyze a cyclical rally in Bitcoin and altcoins.