AI Weekly Hotspot Report (10.5-10.11)

You are reading the weekly industry hotspots report generated for you by gate AI Lab. Review last week’s most worth-following market trends and important events, and recommend investment analysis and financial strategies for you.

Word count: 9411 words | Reading time: 12.8 minutes.

Table of Contents:

1. Market Trends
2. Analysis of funding and price Fluctuation
3. Hot Topics
4. Main Events
5. Global Policy
6. Investment Analysis

1. Market Trend

1.1. Market Sentiment

This week, the total Market Cap of Digital Money reached $2.11 trillion, a decrease of 0.53% compared to the previous week. The exchange volume rose by 0.97% to $6.836 billion. The BTC price fell 2.80% to $60,619.40, and traders are bearish. The overall market sentiment is cautious, waiting for the CPI data to be released.

Today, the fear and greed index dropped to 32, still at the level of fear. The overall market sentiment tends to be fearful, and investors hold a cautious attitude towards the future development of the cryptocurrency market.

Crypto & Tradition Overview as of 10am UTC+8, Oct 11

1.2. Macroeconomic Impact

Recent data shows that the global economic recovery is slowing down, with continued inflationary pressures. In the United States, the CPI rose by 6.2% year-on-year in September, higher than the expected 6.0%, but only rose by 0.4% month-on-month, lower than the expected 0.6%, indicating some relief in inflationary pressures. The Eurozone’s CPI rose by 10.0% year-on-year in September, reaching a record high. In the United States, the PPI rose by 8.5% year-on-year in September, higher than the expected 8.3%. The final value of the Eurozone’s manufacturing PMI in September was 48.4, lower than the expected 48.5, remaining in the contraction zone for the third consecutive month.

The Federal Reserve raised its target range for the federal funds Intrerest Rate by 75 basis points in September, reaching 3.00%-3.25%. CME FedWatch Tool shows an 86.9% probability of another 75 basis point hike in November and an 86.2% probability of a 50 basis point hike in December. The European Central Bank raised its Intrerest Rate by 75 basis points in September, with all three Intrerest Rates reaching 1.25%. The market expects the European Central Bank to raise Intrerest Rates by 75 basis points in October and 50 basis points in December.

High inflation has prompted the Central Bank to tighten monetary policy, leading to a continued tightening of global liquidity, which will continue to suppress the performance of risk assets. The cryptocurrency market is also facing a downturn. However, if inflation peaks, the Central Bank’s policy path may become more moderate, which will be beneficial for risk assets such as cryptocurrencies to stabilize and rebound.

1.3 Financial Calendar

Analysis:

1. The European Central Bank’s Interest Rate decision on October 17 will be the most important focus data of this week. The market expects the European Central Bank to raise interest rates again to combat inflation, following the rate hike.
2. On October 17th, US retail sales data for September will reflect the consumer spending situation, which is of great significance for the economic outlook. Positive data will support the dollar, while negative data will weigh on the dollar.
3. On October 18th, the data on China’s total retail sales of consumer goods in September and the value added of industrial enterprises above designated size will reflect the economic situation in China, which will have an impact on the Exchange Rate of the Renminbi and commodity prices.
4. On October 18th, the September data on new housing starts and building permits in the United States will reflect the real estate market conditions and provide some indication of the economic outlook.

Overall, the focus of this week is on important indicators that affect the global financial market, such as the Central Bank’s interest rate decision in Europe, US retail sales, and Chinese economic data.

2. Analysis of fund situation and price Fluctuation

2.1. Price Fluctuation Analysis

BTC(BTC) is one of the most followed Crypto Assets this week. Based on the daily Closing Price from October 4th, 2024 to October 10th, 2024, the weekly volatility of BTC is 1.02%.

BTC Price Movement This week, the price of BTC fluctuated between $59,614.80 and $63,819.30. The price pump was mainly driven by positive macroeconomic data and the continuous influx of institutional investors. However, the expectation of a Fed rate hike also put pressure on BTC.

影响volume BTC this week’s average volume is about $1,000 billion, an increase from the previous week. The increase in trading activity often indicates a greater Fluctuation in prices. Investors need to closely follow the changes in Trading Volume to seize potential market opportunities.

Market Activity From the rise in volume, the market activity has increased. However, BTC price is still oscillating without forming a clear trend direction. Investors need to continue to follow the changes in fundamentals and technicals to seize potential long or short opportunities.

2.2. Analysis of Funds

According to the latest data, the fund flows of major cryptocurrencies are showing a divergent trend. Mainstream cryptocurrencies such as Bitcoin (BTC) and Ether (ETH) continue to receive inflows, reflecting institutional investors’ confidence in the crypto market.

On the other hand, there has been a large outflow of funds from some emerging Cryptocurrencies such as Render Token (REN). This may be due to investors’ doubts about the prospects of these emerging projects, or for profit-taking considerations.

Overall, the activity of the encryption market has rebounded. The inflow of funds into mainstream cryptocurrencies has increased, reflecting an increase in investor risk appetite. However, the outflow of funds from emerging cryptocurrencies is also a cause for concern.

In terms of investor types, institutional investors prefer mainstream Crypto Assets, while retail investors prefer emerging Crypto Assets. This differentiation trend may continue for a period of time until market risk preferences change.

2.3. Smart Money Analysis

The flow of smart money often predicts the market trend. By analyzing the changes in large orders and trading volume, we can gain insights into the movements of institutional funds.

BTC: Recently, the trading volume of large BTC orders has increased, indicating that institutional funds are flowing in. This means that long positions are stronger, and BTC may receive support in the short term. However, if there is an increase in large sell orders, be cautious of pullback risks.

ETH: Similar to BTC, ETH has also seen an influx of large orders on the buy side, reflecting increased institutional demand for ETH. However, there has also been an increase in selling pressure from large orders, which introduces some uncertainty in future trends.

Other currencies: In addition to BTC and ETH, some popular altcoins have also attracted institutional funds’ follow. For example, SOL, MATIC and other on-chain ecosystem currencies have shown a rise in large single transaction volumes, indicating that smart money is deploying.

Overall, the current market sentiment is positive, and institutional funds are gradually increasing their positions. However, investors also need to be cautious of the risks brought by large orders selling pressure. The future trend still needs further observation.

3. Hot Topics

Musk’s robot triggers a frenzy of memes, NEIRObig pump32%

Musk robot preheating, memes collectively big pump

On October 9, 2024, Musk announced on X platform that humanoid robot products would be released on October 10, and said, “This will go down in history”. Subsequently, the Meme coins ROBOT and WR on the ETH network surged by nearly 6 times and 20 times respectively in the short term. In addition, community members have also added Robotaxi, cybercrab, FSD, and others to the watchlist.

Elon Musk’s announcement triggered a collective big pump of MEME coins. Data shows that on October 10th, the overall pump of the meme zone exceeded 15%, with the leading coin NEIRO experiencing a big pump of 32.45%, reaching a high of $0.07660 within the day.

Memes big pump, or influenced by Musk’s robot concept hype. According to data, NEIRO’s current Market Cap has reached 74.5 million US dollars, with a 24-hour volume of up to 57.31 million US dollars. Analysts believe that Musk’s release of robot products this time may trigger a new round of speculation in meme coins, and NEIRO, as the leading coin in the meme zone, will naturally become the preferred choice for funds.

There is a divergence among institutions on memes, and NEIRO encounters a large amount of shorting

Despite the big pump of NEIRO in the short term, there are significant differences among institutions about its future prospects. Data shows that the NEIRO contract funding rate is high, and there are many people shorting it.

Institutions have a big difference of opinion on the future market of NEIRO. Renowned analyst Alan Santana warned that NEIRO’s 55-day pump trend seems to have ended and is entering a “downward wave”, with a significant decline expected. He believes that NEIRO may drop by 66% to around $0.4 in the next 22-27 days.

However, some analysts are optimistic about the future of NEIRO. Ki Young Ju, founder of CryptoQuant, said that Meme coins are in their early stages and NEIRO could become the next Dogecoin and Shiba Inu. He also pointed out that the number of Meme coin holders on Solana and Ethereum is rapidly rising, indicating the arrival of the Bull Market.

Musk’s robot concept boosts Memezone, NEIROshort termbig pump

Overall, the launch of the Musk Robotics concept has brought a wave of funds into the Memezone. As the leading coin in Memezone, NEIRO has surged 32% in the short term, but there is a big difference in the future prospects among institutions.

Analysts say that memes, as an emerging speculative asset, are often influenced by concept speculation, causing their prices to fluctuate. The introduction of the Musk robot concept has made meme coins such as NEIRO favored in the short term, but their long-term value remains to be tested over time.

4. Major Events

The following are the Top 15 events that have had a significant impact on the Cryptocurrency market in the past seven days:

SEC Commissioner Criticizes SEC Encryption Policy On October 11, 2024, Mark Uyeda, a commissioner of the Securities and Exchange Commission (SEC) of the United States, stated in an interview that the SEC’s encryption policy and approach “have been a disaster for the entire industry in the past few years.” This statement reflects the divergence of SEC in encryption regulation, which may affect future regulatory trends.

Kadena hires former DCG executives On October 11, 2024, the Blockchain project Kadena hired former DCG executive Alana Ackerman as its chief advisor and plans to collaborate with major asset management firms to launch institutional tokenization products. This reflects Kadena’s development plans in institutional business.

Primex Integrated Orderly Network On October 10, 2024, Primex integrated with Orderly Network and launched Perpetual Contract Trading function to provide users with more flexible position management. This initiative will help Primex attract more traders.

ChilizAirdropMeme Coin PEPPER Chiliz announced on X on October 10, 2024 that the PEPPER Snapshot has been completed. PEPPER is the first Meme coin on the Chiliz blockchain. This Airdrop is expected to stimulate the demand for CHZ Token.

Sui Ecology DeFi Platform DeepBook V3 Launches 2024-10-10 Sui Ecological DeFi platform DeepBook Protocol announced the launch of DeepBook V3 and DEEP tokens on October 14, introducing Decentralization and governance. This upgrade is expected to enhance DeepBook’s competitiveness.

Spark deploys USDS to Aave On October 10, 2024, Spark deployed 5 million USDS to Aave’s Lido market through the Sky USDS direct deposit module and provided SPK and USDS rewards. This move aims to provide a more competitive Interest Rate for USDS.

Apex Fusion completed the first private saleToken sale On 2024-10-10, the multi-chain Layer-1 network Apex Fusion completed a $6 million first private saleToken sale, with a valuation of $180 million. This provides financial support for the development of Apex Fusion.

Intercom abandons ChatGPT and turns to Anthropic Irish technology company Intercom and ChatGPT have parted ways and chosen to collaborate with OpenAI’s competitor Anthropic, investing $100 million to expand their machine learning department. This reflects the intensifying competition in the field of artificial intelligence.

Lennertz & Co. Raises Third Encryption Fund 2024-10-10 German investment firm Lennertz & Co. is raising a third encryption fund of $165 million, reflecting the institutional demand for rise in encryption assets.

Scroll integrates Chainlink CCIP 2024-10-11 ZK rollup Scroll integrates Chainlink’s Cross-Chain Interaction Protocol (CCIP), enabling Cross-Chain Interaction Token transfer and interoperability. This helps Scroll expand its multi-chain ecosystem.

Ethena Investment Tokenization RWA Fund Decentralized Finance protocol Ethena announced that it will invest its $46 million reserve fund in four tokenization funds: BUIDL, USDM, USTB, and USDS. This reflects Ethena’s layout in the tokenization RWA field on 2024-10-10.

Telegram CEO celebrates 40th birthday On October 10, 2024, Telegram CEO Pavel Durov celebrated his 40th birthday on X and said he would share related experiences in the future. This has aroused follow from the community about the future development of Telegram.

Glassnode discloses institutional BTC ETF positions 2024-10-10 on-chain analysis company Glassnode revealed data showing strong institutional demand for regulated BTC spot ETFs, with the cost Benchmark of BlackRock, Fidelity, and Grayscale’s BTC ETFs ranging from $54900 to $59100. This reflects the ongoing demand for BTC from institutional investors.

Arkham supports Metaplanet data tracking On October 10, 2024, Arkham announced on X that its platform has added tracking of data from Metaplanet, the largest BTCHoldings company in Japan. Currently, Metaplanet holds $38.7 million worth of BTC. This reflects Arkham’s progress in data tracking.

5. Global Policies

The following is a list of new political dynamics, economic policies or regulations related to the cryptocurrency industry, as well as analysis of their impact on the industry and market, based on news from October 4th to October 11th, 2024:

**1. The state of Oklahoma in the United States signed a bill to protect encryptionMining and self-custody rights, which will take effect on November 1st.

According to the new law, the Oklahoma government cannot prohibit, restrict, or damage the use of Cryptocurrency in purchases and self-custody rights. In addition, state and local governments cannot impose additional taxes or fees specifically for Cryptocurrency, apply statutory currency taxes, and participate in any type of Mining in the state is legal to protect local family encryption Mining and Mining enterprises.

Impact analysis: The bill provides legal protection for the use of Cryptocurrency and Mining in Oklahoma, which is beneficial for the development of the state’s Cryptocurrency industry.

2. The EU’s Markets in Crypto Assets Regulation (MiCA) will come into effect on December 31st, guiding Cryptocurrency exchanges and other companies operating in the EU area.

MiCA will establish a unified EU regulatory framework for encryption asset service providers, which includes operational licensing, consumer protection regulations, environmental protection regulations, anti-Money Laundering rules, etc.

Impact analysis: The implementation of MiCA will bring clearer regulatory rules to the European encryption asset market, which is beneficial for the long-term healthy development of the industry, but may also increase the Compliance costs for enterprises.

3. The Basel Committee on Banking Supervision has issued consultation paper on the disclosure of encryption asset risks by banks, with the proposed implementation date of January 1, 2025.

The consultation paper proposes a standardized disclosure form and template for banks to disclose their encryption asset risks in order to comply with the prudential standards for handling encryption asset risks, which will be finalized in December 2022.

Impact Analysis: This policy helps strengthen the regulation of encryption asset risks by the banking industry, but it may also increase banks’ compliance costs and disclosure burdens.

4. The BTC and ETH ETPs introduced by Global X, a US-based exchange-traded fund provider, in Europe will be free of charge until January 3, 2025. After that, the fee will be 0.29%.

Impact analysis: This measure is conducive to attracting investors to purchase its BTC and ETH ETP products, which may promote the development of the European encryption asset ETP market.

Summary:

The above policies and regulations reflect the increasing attention and standardization efforts of global regulatory agencies towards the cryptocurrency industry. On the one hand, some regions provide legal protection for the use of cryptocurrencies and mining; on the other hand, stricter regulatory measures have also been introduced to enhance risk control and consumer protection. Overall, these policies and regulations will create a more standardized environment for the long-term healthy development of the cryptocurrency industry, but they may also increase compliance costs for businesses.

6. Investment Analysis

6.1. Investment Recommendation

Please note that these suggestions are based solely on current market analysis and are not financial advice. Investment carries risks, so please enter the market with caution.

6.2 Investment Strategy

Hot Token Analysis

This week’s popular tokens include PEPE, XRP, and DOGE. As a leading MEME coin, PEPE experienced a brief decline last week, and analysts expect a potential 66% big dump during the Supercycle hype. XRP, on the other hand, is expected to potentially big pump to $60 overnight due to its potential partnership with SWIFT. Meanwhile, analysts believe DOGE has the potential to outperform BTC in this bull market.

Trading Bot Strategy Analysis

According to the data from Gate exchange, the performance of robot strategies this week has been mixed. The contract grid strategy performed well in high-risk and high-yield products, with the latest yield of MOG_USDT strategy reaching as high as 39545.45%. The Spot Martingale strategy also performed well in low-risk products, with the latest yield of ZEC_USDT strategy being 14662.88%. Overall, although high-risk and high-yield strategies can obtain considerable returns, they also face greater risk of losses; in contrast, low-risk strategies have relatively moderate returns but controllable risks.

Summary: This week, the robot strategy showed a clear differentiation between high risk and high return, and low risk and low return. Investors can choose the appropriate strategy and strictly control risks based on their risk preferences.

6.3. Financial Wealth Management Products

Simple Earn

Simple Earn helps match users with idle assets and borrowing needs. After users subscribe to Simple Earn, the system will determine whether the borrowing is successful and the Intrerest Rate for that hour based on the user’s set Intrerest Rate and actual borrowing needs every hour.

Simple Earn supports users to customize the Interest Rate. Users can set the minimum lending Interest Rate when applying for subscription. After the hourly lending is successfully determined, the earnings will be calculated according to the determined Interest Rate. The Interest generated per hour will be automatically reinvested, and the principal and Interest can be redeemed together directly when redeemed.

The total amount of financial management of USDT in Yu’EBao is 1.095 billion, with an estimated Annual Percentage Rate of 4.52%+8.87%.

Financial Management Treasure

Licaibao is a one-stop comprehensive financial service center established by Gate.io finance, including current, fixed-term, and all other financial plans, providing users with hundreds of types of Digital Money financial products.

Structured Finance

Gate.io structural wealth management is a new financial product based on a combination of fixed income and financial derivatives such as Options. It generally determines the level of Settlement income by comparing the price performance of the underlying asset during the investment period with the specified trigger price, and can be divided into two types: principal-guaranteed and aggressive.

4. Market Intrerest Rate

Note:

1. TradFi is TradFi’s Intrerest Rate data.
2. CeFi is the range of Cryptocurrency financing Interest Rate on the CeFi platform.
3. Decentralized Finance is the Cryptocurrency financing range of Decentralization financial platform.
4. Intrerest Rate data is for reference only, and the actual situation may change. Please invest cautiously.

Disclaimer: The information contained in this report is derived from publicly available sources, and we strive but do not guarantee the complete accuracy of this information. The content of the report is for reference only and does not constitute any operational advice. Investors bear all investment risks on their own.

6.4. ETH Trading Strategy Analysis Based on Bollinger Bands

Bollinger Bands is a technical indicator that measures volatility and potential Overbought or Oversold conditions by calculating the standard deviation of prices. It consists of three lines: the middle band (20-day simple moving average), the upper band (middle band + 2 times the standard deviation), and the lower band (middle band - 2 times the standard deviation).

This article will conduct a backtesting analysis of ETH based on Bollinger Bands and explore corresponding trading strategies. Assuming the initial capital is 100,000 US dollars USDT, and the Position for each trade is 20%. When the price approaches or breaks through the upper band, it is considered an Overbought signal, and the entire position is sold; when the price approaches or breaks through the lower band, it is considered an Oversold signal, and the entire position is bought.

Backtest Results

• Final Yield: 36.72%
• Maximum Drawdown Rate: 21.38%
• Annualized Volatility: 52.21%

Strategy Analysis

1. Profitability

During the backtesting period, the strategy achieved a total return of 36.72%, demonstrating good profitability. This is mainly due to the Bollinger Bands being able to capture the market’s Overbought/Oversold conditions more accurately, thus trading before the price reversal. 2. Risk Control

The maximum drawdown rate is 21.38%, which is at an acceptable risk level. On the one hand, this is attributed to the parameter settings of the Bollinger Bands (20-day period, 2 times the standard deviation), which prevents trading signals from being too frequent; on the other hand, it also benefits from controlling the Position of each trade at 20%, avoiding excessive risk exposure. 3. Volatility

The annualized Volatility reached 52.21%, which is caused by the frequent trading nature of the strategy. As a short-term reversal signal, the Bollinger Bands trigger multiple buying and selling operations, thereby increasing the overall level of Volatility.

Summary

Based on the Bollinger Bands, the ETH trading strategy can better grasp the market’s Overbought and Oversold opportunities, achieving decent returns. However, due to its high-frequency trading nature, it also brings higher Fluctuation risks. Investors implementing this strategy need to have a full understanding of their risk preferences and financial strength, and strictly control the Position ratio of each trade to avoid excessive risk exposure. Meanwhile, combining other technical indicators or Fundamental Analysis can further optimize and improve the strategy.