SignalPlus Macro Analysis: ETH ETF Inflows Rebound, Potentially Fueling Further Altcoin Rally

By: blockbeats|2024/12/02 21:15:01
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Original Title: "SignalPlus Macro Analysis Special Edition: Final Stretch"
Original Source: SignalPlus

SignalPlus Macro Analysis: ETH ETF Inflows Rebound, Potentially Fueling Further Altcoin Rally

Last week was the Thanksgiving holiday in the United States, with light market trading volume maintaining an overall consolidation pattern. The U.S. stock market is set to make history once again, with 2024 poised to be one of the best-performing years in history, with 5 out of the past 6 years seeing double-digit returns.

Market breadth continues to be supportive, with the 52-week stock high-low quantity difference still appearing healthy. The upward trend remains intact, the volatility index (VIX) is trending downwards, and following Trump's announcement that Scott Bessent will be the Treasury Secretary, the bond market has calmed down, with the 10-year yield dropping nearly 35 basis points from its October high.

In addition to his so-called "pro-cryptocurrency" stance, Bessent is also a fiscal hawk and a supporter of an independent Federal Reserve. His proposed 3-3-3 plan (reduce the fiscal deficit to 3% of GDP, raise real GDP growth to 3%, and increase daily energy production by 3 million barrels) has brought relief to the U.S. fixed-income market. Since his nomination, the yield curve premium has remained stable at the current level.

While there are still doubts about his core views, journalists researching his early speeches have found that due to central bank accumulation, he has a "long-term bullish" view on gold. Whether this will have a spillover effect on Bitcoin, especially in the recent discussions about strategic reserve portfolios, remains to be seen. At the very least, the next four years are sure to be very interesting.

Traders are gearing up for a busy week as they approach the final non-farm payroll data release of the year. Despite concerns about rising inflation just beginning to emerge, the market still anticipates a roughly 65% chance of a rate cut. However, considering the strong economic conditions, the forward rate cut expectations for 2025-2027 have been significantly reduced. Regarding the employment data, the market expects an overall employment data rebound of around +160,000, while the unemployment rate is expected to hover around 4.3%. Given the recent weakness in PMI surveys and high-frequency employment data, the final data outcome also has the potential to come in below expectations. Nevertheless, unless there is an extremely surprising result, risk sentiment may still remain positive.

The optimistic sentiment in the cryptocurrency market continues to prevail. However, this week's focus is on Ripple. Against the backdrop of expectations that the government will withdraw its long-standing lawsuit, XRP has surged a stunning 73%. This significant upward trend has helped XRP surpass USDT to become the third-largest cryptocurrency by market capitalization. In anticipation of this development, whale addresses have been actively accumulating XRP over the past month (and are now selling).

The current uptrend is mainly concentrated in major coins (excluding ETH), with BTC leading the pack, while altcoins are still struggling to return to their January highs. Although recent successes in Layer 2 and blockchain protocol transformations (such as Hyperliquid) continue to dominate the cryptocurrency market's attention, we are seeing some improvement in Ethereum through inflows into ETH ETFs. Last Friday saw inflows exceeding $330 million. Will we see more rebounds of secondary mainstream coins before the year's end?

Nevertheless, the fundamental indicators of cryptocurrency remain optimistic as the market capitalization of stablecoins has finally exceeded the previous high during the Terra-Luna period. Stablecoins are usually the first entry point for most fiat users into the cryptocurrency market, and a higher market capitalization (with a fixed price, hence entirely quantity-driven) indicates greater mainstream participation.

With investors pouring in more new funds, will we see faster growth in the new year? Let's hope so!

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