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Long-term Investors HODL as Potential Catalysts Approach
- China FUD causes crypto markets to sell-off for the second week in a row. We take a deeper dive to understand the broader implications (or lack thereof) of the most recent regulatory crackdown announced by Beijing.
- Leverage and funding rates are trending lower, signaling uncertainty among short-term market participants.
- Despite recent volatility, HODLers continue to accumulate bitcoins, leading to an increasingly illiquid bitcoin supply.
- The Lightning Network allows Bitcoin to gain adoption as a global currency while saving consumers and merchants billions in annual costs.
- Seasonal trends are starting to look favorable for investors as October has been an overwhelmingly positive month for Bitcoin.
- We view the potential approval of a futures-based Bitcoin ETF and increased confidence surrounding a successful transition to ETH 2.0 to be near-term catalysts that clients should have on their radar.
- Bottom Line: BTC is trading below its 200-day moving average. For those with near-term liquidity needs, it may be suitable to wait until we re-test this level. However, we are steadfast in our view that any near-term selling is an opportunity to buy as we anticipate a risk-on environment through the end of the year to yield a run at all-time highs for both Bitcoin and Ethereum.
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