Wintermute: Bitcoin needs to remain cautious before re-establishing above the 50-week moving average at $75,500
Wintermute stated that after the U.S. midterm elections, the Democratic Party regained control of both houses of Congress, and the market began to reassess the regulatory risks faced by the AI industry. The AI trading, which was previously boosted by favorable Washington policies, has started to cool down. If the Federal Reserve raises interest rates during the correction of AI assets, the tightening of liquidity and the decline in risk appetite may simultaneously exert pressure on the cryptocurrency market.
In the cryptocurrency market, Bitcoin rebounded to $81,000 last Wednesday but subsequently retraced most of its gains, dropping to a low of $73,500 on Sunday, close to the 200-day moving average of $73,000. Bitcoin's weekly close fell below the 50-week moving average of about $75,500, ending a previous streak of seven consecutive weeks above that moving average. The U.S. spot Bitcoin ETF saw a net outflow of $1.28 billion last week, marking the largest single-week outflow since June and erasing the cumulative net inflow for the year; only Wednesday recorded a net inflow of funds for the week.
Meanwhile, over $1 billion in positions were liquidated in the market, with Ethereum's liquidation scale exceeding that of Bitcoin. Altcoins performed even worse than Bitcoin, with NEAR, HYPE, ENA, and LIT all dropping more than 10%. In contrast, ZEC became one of the few large-cap assets to rise against the trend, indicating that there is still some market demand for privacy-focused projects. Looking ahead, the market needs to remain cautious until Bitcoin reclaims the 50-week moving average. If Bitcoin's daily close falls below $73,000 and the 200-day moving average, the next key level to watch will be $68,000, and altcoins that previously rebounded significantly may face greater selling pressure. If Bitcoin's daily close reclaims and stabilizes at $80,000, and the spot Bitcoin ETF resumes weekly net inflows, a shift to a more positive outlook may be possible.
In the short term, attention should be paid to the U.S. CPI data for October to be released on Tuesday, with core CPI expected to rise by 0.2% month-on-month. Additionally, Cisco and Applied Materials will report earnings on Thursday, U.S. PPI data will be released on Friday, and NVIDIA is scheduled to announce its financial results on November 17. The Federal Reserve will hold a meeting on interest rates from December 8 to 9, with the market currently estimating a probability of about 77% for an interest rate hike.