GT Radar Weekly Report 9/25: Shanzhai Market rebounds strongly, bull market is emerging, but there is a risk of short-term decline

Market analysis - Shanzhai market rebounds strongly, bull market is emerging but there is a risk of short-term decline

Under the dual benefits of the US Federal Reserve's announcement of a 2 yard interest rate cut and Japan's announcement of no interest rate adjustment last September 20th, the doubts of the entire financial market have been settled. Funds have begun to withdraw from risky assets, whether it is the stock market or cryptocurrency, which have had good gains in the past week. US presidential candidate Ho Kam li has also publicly stated that she will support the cryptocurrency industry after taking office, so it is relatively certain that regardless of which candidate is elected in the end, there will be a certain amount of positive support for cryptocurrency.

The cryptocurrency market has seen the beginning of a bull market in the past week, especially in the altcoin market where the trend has been very strong. Many currencies have rebounded from their lows by more than 20%. Previous weekly reports mentioned that shallow investment targets AAVE and SUI have both seen significant increases, with SUI approaching a 50% increase. In addition to the altcoin market, the meme market has also seen several golden dogs with over a thousand fold increases, and the wealth creation effect is beginning to emerge, all of which are signs of a bull market.

On the other hand, mainstream currencies have performed relatively averagely in the past week, with BTC, ETH, and SOL all showing small gains. However, BNB may have broken through the $600 mark due to the release of CZ from prison on September 30th and the impact of new LaunchPool news, making it the most rapidly rising mainstream currency.

In terms of price trends, BTC is in the pressure zone of $63000 to $65000, which has been challenged twice within a week and is currently showing signs of being suppressed. It is indeed a relatively high point in the short term, and the opportunity cost of chasing the rise is relatively low now. Instead, it can wait until it is confirmed that it has broken through the $65000 range before adding positions. However, based on the reversal of ETH/BTC trading pairs and the recent trend of the altcoin market, it can be expected that BTC's next increase will not be stronger than that of altcoins. Moreover, the probability of BTC, a large market value currency, returning to $70000 or even rising in the short term is relatively low, and the earliest chance may be higher after the US presidential election. Therefore, after the recent pullback, it is recommended to add positions again. The good opportunity for Bitcoin is that the general trend has already formed, but the short-term market risks still revolve around concerns about the US economic recession, Therefore, investors need to pay attention to the performance of the US job market data this Friday.

Potential investment opportunities

Ethena

Firstly, Ethena (ENA), a decentralized stablecoin protocol that emphasizes Delta neutrality. The operation mechanism of Ethena's stablecoin USDe is mainly achieved by mortgaging Ethereum and conducting Delta hedging on it to stabilize the value of its stablecoin USDe. Simply put, Ethena reduces or eliminates the impact of asset price fluctuations on portfolio value by shorting collateral, while also earning additional income such as ETH staking and funding rates, providing sustainable deposit returns for USDe stablecoins.

The reason why Ethena is optimistic is mainly based on the following reasons:

Safely pass the stress test

During the recent decline, the overall market's funding rate once turned negative, but Ethena did not face the sustainability issues that the community had previously been concerned about as a result. According to DeFiLlama's data, although the median annual interest rate in the third quarter has decreased, the overall level remains at 4-10%.

At the same time, according to ETH calculations, Ethena's total locked asset value did not show a significant decrease and remained at a level close to 1 million ETH.

The market enters a cycle of interest rate cuts

As is well known, the Federal Reserve announced a 2-yard interest rate cut on the 18th, which means that interest rates, including government bonds, will also decline. In such an environment, large investors will seek other funding stops with higher interest rates. At present, the yield on 10-year US Treasury bonds is 3.74%, while Ethena still maintains a stable annualized yield of 6% (excluding ENA airdrop rewards), and as the Federal Reserve continues to cut interest rates, the gap between the two will further widen, giving Ethena more advantages.

Bull market pushes up funding rates

The source of Ethena's interest rates largely depends on the level of funding rates, and the market generally expects the cryptocurrency market to have a chance to win another wave after the end of September. If this situation really happens, the funding rate will inevitably increase accordingly, which will bring higher annualized returns to Ethena.

technical analysis

In the short term, the price has broken through EMA200 and continues to rise, showing upward momentum. And the trading volume has significantly increased in the previous month, indicating a strong willingness to switch hands and take orders below. However, due to the long-term downward trend of EMA200, this may indicate that the overall trend is still biased towards weakness. The optimal entry position can wait for the price to fall back to EMA200 before intervening, as it is still at a relatively low level in the current overall framework.

Pendle Finance

Another project focuses on DeFi protocol Pendle Finance for yield tokenization. Although Pendle Finance's total locked asset value has experienced a significant decline since July, dropping from $6 billion to $2.3 billion, there have been signs of a rebound recently.

As an interest rate derivative agreement, Pendle Finance has recently expanded its product line from Ethereum's liquidity re staking token (LRT) to the staking ecosystem of Bitcoin, such as Corn LBTC and EtherFi's eBTC. In the future, it will continue to launch other BTC products such as Bedrock uniBTC, Solv solvBTC, and PumpBTC, which will allow it to share market dividends while speculating on the future Bitcoin staking and DeFi tracks.

And like Ethena, such agreements that can bring passive benefits will receive market attention after the market enters the interest rate cut cycle.

technical analysis

Compared to the trend of ENA, Pendle's bullish pattern is more complete, forming a clear bottom in early September and a bullish trend that deviates from the bottom in early August. Moreover, EMA200 has already turned upwards, which is a clear characteristic of the trend change. In the short term, when the price enters a convergence pattern, it can first intervene in some spot prices, and continue to decline until the price falls below $4.

Binance Documentary Analysis

GTRadar – BULL

GTRadar - Balance

GTRadar - Potential Public Chain OKX

The returns of 'GTRadar BULL', 'GTRadar Balance', and 'GTRadar Potential Chain OKX' in the past 7 days were+5.78%,+3.42%, and+3.98%, respectively, and the returns in the past 30 days were+0.96%, -2.56%, and+4.07%, respectively. At present, GTRadar BULL holds a net long position of 60%, mainly in BTC. At present, GTRadar - Balance holds a net long position of about 40%, mainly in BNB and BTC. At present, GTRadar - Potential Public Chain holds a net long position of about 25%, mainly in BTC. The long-term returns of a follower who frequently changes their investment portfolio are not as good as those who continue to follow a group of followers. Do not easily end a follower just because of a short-term pullback. From the curve chart, a pullback is actually a good time to start a follower, and going in and out can significantly reduce the yield.

Focus News

The Federal Reserve cuts interest rates by two yards, Powell emphasizes: the economy is not in recession!

The Federal Reserve made a bold decision in its interest rate decision early this morning, cutting interest rates by two yards in one go and lowering the target range to 4.75% to 5.0%, marking the first interest rate cut in over four years. Chairman Powell emphasized at the press conference after the meeting that the US economy is in good condition and there are currently no signs of recession. Cutting interest rates by two digits is a "recalibration" of the Federal Reserve's monetary policy, so there is no guarantee that the same level of interest rate cut will be made at the next meeting. Investors should not expect the Fed to continue to cut interest rates at this level.

Trump uses Bitcoin to buy hamburgers in New York

Donald Trump, the Republican presidential candidate, appeared in a restaurant in New York City famous for accepting Bitcoin payments, becoming the first former US president to use cryptocurrency for transactions.

BlackRock White Paper Claims Bitcoin as a Diversified Safe haven Investment Tool Different from Traditional Assets

After successfully launching a Bitcoin spot ETF, BlackRock recently released a detailed report outlining the unique position of Bitcoin among major asset classes.

Hong Kong is expected to introduce staking function for Ethereum spot ETFs this year

Andrew Vranjes, Senior Vice President and Head of International Business at Blockdaemon, stated in an interview at the Token2049 event in Singapore that Hong Kong regulators may approve the introduction of staking functionality for Ethereum spot ETFs this year.

BingX exchange confirms hacked! Total loss exceeds 40 million magnesium

The BingX exchange confirmed on the 20th that there was abnormal access to its hot wallet and announced temporary maintenance of its wallet system. Subsequently, the platform immediately initiated emergency response measures including asset transfer and suspension of withdrawals. Regarding this, Vivien Lin, the product manager of BingX, stated that the platform will bear all losses with its own funds.

Ethereum's biggest upgrade 'Pectra' will be executed in two phases

Ethereum developers agreed on Thursday to split the upcoming hard fork "Pectra" into two phases to reduce the complexity of this large-scale upgrade and lower the risk of errors or vulnerabilities.

Micro strategy completes issuance of 1 billion magnesium convertible bonds and buys 7420 BTC

Micro Strategy announced on the 20th that it has completed its latest round of convertible bond issuance, with a net income of up to 1.01 billion US dollars. Subsequently, the company immediately announced the acquisition of 7420 BTC for $458.2 million.

Democratic presidential candidate in the United States, Carrie Lam, made her first public comment on cryptocurrency

On Sunday, Democratic presidential candidate Kelly Ho promised to promote her economic agenda to donors at the Cipriani fundraising event in New York City, stating that if elected, she would help drive investment in artificial intelligence and cryptocurrency. The US presidential candidate said at the conference, "I will bring together workers, small business founders, innovators, and large corporations. We will work together to invest in America's competitiveness and future. We will encourage innovative technologies like artificial intelligence and digital assets, while protecting our consumers and investors

Macroeconomic variables affecting cryptocurrency market, with correlation with US stocks approaching historical highs

According to a correlation study, the trends of digital assets and US stocks are more synchronized than ever before, indicating that macroeconomic variables driving the stock market are also affecting the cryptocurrency market.

EIGEN Foundation will lift EIGEN token transfer restrictions on September 30th

According to the latest announcement released by the EIGEN Foundation, the token transfer restrictions of the Ethereum re staking protocol EigenLayer will be lifted on September 30, 2024, and there is a 7-day withdrawal waiting period for de staking. This means that those who are currently staking but want to transfer their tokens immediately after the transfer restrictions are lifted must perform the de staking operation now.

Insiders: Prediction Market Polymarket Considers Issuing Tokens to Raise Over $50 Million

According to sources cited by The Information, decentralized prediction market platform Polymarket is considering issuing tokens to raise over $50 million in new funding to help its platform operate.

Ethereum spot ETF hits largest daily net outflow since end of July

According to Sosovalue's data, the US Ethereum spot ETF recorded a net outflow of $79.21 million on the 24th, setting a record for the largest daily net outflow since July 29th. Most of the net outflow came from the ETHE of grayscale, with a net outflow of approximately $80.55 million, the largest outflow record since July 31st.

The above content does not constitute any financial investment advice. All data is from the GT Radar official website announcement. Each user may have slight differences due to different entry and exit prices, and past performance does not represent future performance!

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