SignalPlus Macro Analysis Special Edition: Thanksgiving

After experiencing a severe dumping last week, crypto assets have shown initial signs of stabilization. On Monday morning, prices rebounded from a low slightly above 80,000, with trading prices approaching 88,000. As Fed Chairman Williams reignited expectations for a rate cut in December, the market entered the Thanksgiving holiday week with a cautious optimistic sentiment. A strong rebound in the stock market (S&P 500 Index +1.5%, Nasdaq Index +2.7%) and early rebalancing fund flows ahead of the month-end also helped boost risk sentiment.

Risk sentiment has broadly improved, with BTC options open interest slightly turning positive, and the put/call options ratio for the end of the month is around 0.67. A large number of put options have strike prices concentrated around 80,000, with a positive skew being actively bought, while call options are being heavily sold. The market undoubtedly feels better hedged against further declines, allowing it to enjoy a rebound above the 82,000 support level.

Given that BTC and ETH have underperformed compared to gold and the stock market this year, with a gap ranging from 30% to 60%, ETF fund flows have turned negative. Since November, the total outflow of BTC and ETH ETF funds has reached approximately $5 billion, marking the worst performance of the month so far. In contrast, stock ETFs have recorded inflows of over $96 billion so far this month. Interestingly, retail investors seem to be starting to differentiate between the risks of crypto assets and stocks, selling the former and shifting towards buying the latter.

Worse still, more and more discussions claim that Bitcoin mining is no longer profitable at the current levels, and existing miners are becoming more aggressive sellers, shifting some of their computing power to the AI field (just like everyone else). This exacerbates concerns that the market will face steadfast sellers from miners, OG whales, underwater market makers, and overvalued protocols, causing the current fear sentiment to reach an unprecedented negative level.

Nevertheless, both from an emotional and technical perspective (such as the Bollinger Bands), the market is currently in a severely oversold state. As long as there are no new external factors (such as a DAT forced sell-off), the price is likely to have already reached a local low. We expect the price to fluctuate between 82,000 and 92,000 here. The next important price support level is around the 78,000 area, and a sustained drop below this position will open up greater downside potential, but for now, this is not our baseline scenario.

Looking ahead, this week's data is very busy, but since the Fed has conveyed its easing intentions, this data is unlikely to significantly change recent risk sentiment. The U.S. stock market remains in an upward trend, and positive seasonal factors will be favorable for it before the end of the year. The Crypto Assets market is hopeful that it has reached a local low, but we need a firm price breakthrough of 92,000 to repair some of the recent technical damage and indicate further Rebound. Good luck, and may your trading go smoothly.