FOMO is Back: Are You Holding Enough Bitcoin and Altcoins to Ride the Next Wave?

👇1-11) Since the Fed’s September rate cut, Bitcoin has gained 5%, while Ethereum has surged 11%, and certain altcoins have seen impressive gains—+54% for ENA, +51% for SEI, and +36% for Shiba Inu. Altcoins are exploding. Further upside appears likely as stablecoin minting accelerates and Chinese OTC brokers report billions in inflows. With Bitcoin breaking above $65,000, we anticipate a swift move toward $70,000, followed by new all-time highs in the near term.

Bitcoin breaks out of the downtrend, targets $70,000, then all-time highs.

👇2-11) After the July 31 FOMC meeting, where the Federal Reserve postponed its critical rate cut decision until September, stablecoin minting experienced a sharp increase. In the following weeks, nearly $10 billion in stablecoins were issued, flooding the cryptocurrency market with liquidity and significantly surpassing Bitcoin ETF flows.

👇3-11) Circle, which typically caters to more regulated institutions, has accounted for a disproportionate 40% of recent stablecoin inflows, signaling increased allocation from larger market players. Unlike USDT minting on Tron, typically associated with capital preservation, USDC minting may indicate a rise in DeFi activity. Year-to-date, stablecoin inflows have reached $35 billion, pushing the total value of outstanding stablecoins to $160 billion.

👇4-11) After the July FOMC meeting, bond yields steeply declined, with the 10-year Treasury yield dropping from 4.16% to 3.7% in just a week. This dip below the crucial 4.0% threshold has ignited a resurgence in DeFi activity, referred to by some as a ‘DeFi renaissance.’ In August, Aave's lending platform monthly fees surged to $43 million, surpassing the previous peak of $42 million in March 2024. While activity has slowed in September, activity and fees could rebound following the Fed’s recent rate cut.

Bitcoin dominance declines after the Sep FOMC meeting - Game changer.

👇5-11) A notable shift occurred following last week’s FOMC meeting: Bitcoin’s dominance has waned, while Ethereum gas fees have spiked, fueled by a surge in altcoin activity across the ecosystem. If the Federal Reserve remains open to cutting rates, pursuing high-beta altcoins will likely gather further momentum.

👇6-11) Retail crypto trading activity in South Korea supports this trend, with daily trading volumes now hovering around $2 billion. Although still below the staggering $13 billion seen in early March 2024—when crypto volumes were double that of the local stock market, and Shiba Inu, traded in Korea, alone reached nearly 40% of the stock market’s volume—altcoins have dominated trading in the past week, surpassing Bitcoin.

👇7-11) In the past 24 hours, Shiba Inu has reclaimed the top spot in trading volume in South Korea, signaling rising speculation and setting the stage for a potential Q4 rally. Meanwhile, on a less speculative but more structural front, Chinese over-the-counter (OTC) cryptocurrency brokers have consistently reported quarterly inflows of $20 billion for the last six quarters, totaling around $120 billion. In just the first half of this year, inflows have already exceeded $40 billion, with 55% of the total value coming from transactions over $1 million, likely driven by high-net-worth individuals or corporate entities.

👇8-11) Given that 55% of currently mined Bitcoins come from Chinese mining pools—and considering that in early 2014, China dominated 90% of global Bitcoin trading—the recently announced stimulus measures, timed just as the Fed begins cutting rates, could trigger significant capital outflows from China into the cryptocurrency market. In 2013, Chinese exporters used over-invoicing to funnel billions into Bitcoin, triggering a massive rally.

👇9-11) The $278 billion Chinese stimulus plan could ignite a parabolic rally in cryptocurrency prices, fueled by increasing global liquidity. If Trump is re-elected, he may seek to overstimulate the U.S. economy, potentially pressuring the Federal Reserve to reverse its rate-cutting cycle as early as the first half of 2025. However, our immediate attention is on Bitcoin’s recent breakout above $65,000, with a target of $70,000 in the next two weeks and expectations of new all-time highs by late October.

Bitcoin's 30-day realized volatility is far below the 5-year average.

👇10-11) Interestingly, this surge in liquidity coincides with Bitcoin's 30-day realized volatility dropping to just 41%. With lower volatility, institutional traders—who adhere to strict risk management—can take on bigger positions. As Bitcoin's perpetual futures funding rate remains negative (or near zero), traders can assume more risk precisely as Bitcoin breaks out of its lower-highs downtrend.

👇11-11) The likelihood of a Q4 rally is exceptionally high, with gains likely front-loaded. Our recent reports emphasized the importance of positioning for this rally that may just be beginning. FOMO has returned to the altcoin market, fueled by Bitcoin's breakout above $65,000. A major surge could be on the horizon, sparking even more FOMO across the crypto space.