As the DXY index loosened somewhat and stock futures began to recover, Bitcoin (BTC) 
$78,526 experienced an increase during the preparation of this article. Statements from Federal Reserve member Williams hint at a possible interest rate cut in December, overshadowing Lisa Cook’s controversial remarks about the cryptocurrency markets, stock exchange, and Donald Trump.
Will Cryptocurrencies Rise?
MicroStrategy (MSTR) fell from $543 to $177 after reaching its all-time high nearly a year ago, marking a nearly 70% decline in one year. This is concerning for a company holding 3.1% of Bitcoin’s supply. Recently, two rumors have been causing a stir. The first is the bankruptcy speculation of MSTR, but as the first crypto reserve company, its long-term debt structure ensures it won’t collapse due to this downturn. The second rumor is that Grayscale is selling hundreds of thousands of BTC. Sales linked to GBTC conversion depressed prices for months, but there’s no truth in this resurfaced claim.
Ki Young Ju, one of the most popular on-chain analysts, believes that those with long-term accumulation goals might consider current levels for spot purchases.
“If you’re not into derivatives and hold Bitcoin spot, this appears to be a reasonable long-term accumulation zone. From an on-chain cycle perspective, technically the bull cycle ended when Bitcoin approached $100,000 earlier this year. According to classic cycle theory, the market should revisit the realized price around $56,000 to form a cyclical bottom, but with players like MSTR less likely to sell and these coins effectively withdrawn from the market, I doubt we’ll see $56,000. Moreover, macro conditions suggest governments will inject liquidity until mid-next year for political reasons, so market sentiment can recover at any moment. Selling or going short here seems like a poor idea. I could be wrong. I no longer use leverage, so I’m not great with entry timing, but I’m still confident in the long-term trend.”
Post-Dip Cryptocurrency Landscape
CryptoQuant’s Maartunn highlighted a significant influx of USDC into exchanges, suggesting buyers might start taking action. Bitcoin ETF investors have reached their average cost regions. If you believe in the narrative of unseen forces controlling BTC through ETFs, they must have strategies to elevate the markets; otherwise, many investors might sell for loss-cutting, which calls for a vigorous ETF market today.
The US faces a significant budget deficit, with weakened demand for Treasury Bonds. Without introducing new liquidity, the treasury market will become unstable, prompting US policymakers to address this issue by next year. The Japanese government, hours ago, indicated potential “intervention” before the yen reaches 160 against the US dollar. As the Carry Trade story ends, global liquidity takes a substantial hit.
So, what needs to happen? The Fed must shift from its hawkish stance, influenced by figures like Lisa Cook, to a more dovish approach. Inflation is about 1% above the target, resulting in the highest unemployment rates in four years. There are liquidity issues, and the Fed’s continued inflation excuses to suppress the markets make little sense. With unemployment at a four-year peak and inflation dropping from 9% to 2%, concern should shift to growth issues instead. Even if inflation returns to its four-year peak, who would care when employment is already at its worst since then?
