Trading moment: Gold encounters a high correction, Bitcoin hits the $112,000 resistance level

# 1. Market Observation  

Recently, after hitting a new all-time high of nearly $4,380, gold suffered a dramatic plunge. Although market analysis suggests that long-term logics such as inflation hedging and interest rate cut expectations remain solid, technical indicators, market sentiment, and institutional positions all indicate overcrowding. The price trend of gold has significantly deviated from its traditional driving factors such as real interest rates and the U.S. dollar movement, leading to divided opinions on Wall Street. JPMorgan Chase and HSBC have warned that if expectations for the Federal Reserve’s terminal interest rate rise, gold will face challenges; legendary investor Bill Gross even bluntly stated that gold has become a "momentum/Meme asset". However, Bank of America believes that unconventional fiscal policies will continue to benefit gold. Ray Dalio, founder of Bridgewater Associates, fundamentally regards gold as the most mature form of currency and a hedging tool for fiat currencies (which are essentially debts). He also revealed that gold is systematically replacing U.S. Treasuries as the "risk-free asset" in central bank reserves.  

At the same time, AI, as a new macro variable, has attracted much attention. Goldman Sachs believes that the huge capital expenditure in the AI field is sustainable and will significantly improve labor productivity, while Alex Thorn, Head of Research at Galaxy Digital, also sees AI as the core driver of the next bull market. Nevertheless, Qiao Wang, Co-founder of Alliance, warned that if the AI bubble bursts, the crypto market may face a sharp correction, and it has now entered a high-risk danger zone.  

Regarding Bitcoin, after being hit by a number of macroeconomic news, its price has rebounded to above $111,000. Despite the price recovery, there are still significant divergences in market sentiment. From the perspective of capital flow, Bitcoin spot ETFs recorded a net outflow of $1.23 billion last week, the second-highest in history. The Mt. Gox trustee must complete the repayment process by October 31, which may bring potential selling pressure of approximately 22,253 BTC, worth about $2.4 billion. A large number of whales and celebrities have begun to be bearish on the market. Among them, the whale who accurately shorted and made a profit of $160 million before the flash crash on October 11 has opened another short position worth about $75.93 million, with an entry price of $109,133.1; in addition, the address associated with Andrew Kang, Co-founder of Mechanism Capital, also holds a $31.14 million BTC short position and a $46.86 million Ethereum short position, with liquidation prices of $115,000 and $4,073 respectively. Crypto KOL Ansem also stated that he will no longer be optimistic about the future of the crypto market unless Bitcoin rebounds above $112,000. Vincent Liu, Chief Investment Officer of Kronos Research, pointed out that the current key support and resistance levels for Bitcoin are $107,000 and $110,000 respectively. Bitcoin is currently testing the resistance range of $111,700 to $115,500. If it can break through $111,000 strongly, it may trigger short covering and further accelerate the upward momentum. However, there are still significant short-term risks, and ongoing U.S.-China geopolitical tensions continue to affect investor confidence. Analyst Crypto Tony predicts that Bitcoin may fall below $100,000 and will only find a bottom after reaching the range of $91,000 to $95,000.  

However, the bullish force cannot be ignored either. A mysterious whale has increased its long position to $250 million, including a position of 1,610.93 Bitcoins. Analyst Charles Edwards believes that after breaking through $120,000, Bitcoin may quickly rise to $150,000. From a technical perspective, analyst Pat pointed out that the price ratio of Bitcoin to gold has fallen to a historical bottom, indicating the possibility of a new bull market. Although the Fear and Greed Index has dropped to "Extreme Fear", the daily RSI has fallen to its lowest level since April, and analyst Sykodelic believes this is a good opportunity for contrarian trading. Ray Dalio stated that he holds a small amount of Bitcoin for a long time as a diversified asset alongside gold, but also pointed out its shortcomings such as being unable to be held by central banks. Overall, if Bitcoin can stably break through the $111,000 resistance range, the market may usher in a new upward trend; however, if sentiment deteriorates or selling pressure is released concentratedly, a correction below $100,000 cannot be ruled out.  

In terms of Ethereum, BitMine, Ethereum Treasury Company founded by Tom Lee, has accumulated 379,271 ETH worth about $1.5 billion since the "October 11 crash". Tom Lee himself reaffirmed that Ethereum will become the pillar of the digital economy and that the current period is not the peak of the cycle. At the same time, the address associated with Richard Heart, founder of HEX who has been inactive for two years, has also begun to frequently sort out his holdings of 154,825 ETH, with a total value of $611 million. From a technical analysis perspective, Ethereum’s current support levels include the 200-day Exponential Moving Average (200-day EMA) and the lower boundary of the bull flag at approximately $3,500. Well-known technical analyst John Bollinger further pointed out that Ethereum’s chart may be forming a "W-bottom" bullish reversal pattern. Analyst FOUR predicts that if the rebound momentum continues, Ethereum’s price is expected to break through to the $4,450-$4,500 range, and trader Luca even sees the possibility of surging to a new high of $5,200. On-chain MVRV data also supports the view that prices have entered a new upward cycle. If prices remain above the mean band, there is a high possibility that Ethereum will reach the $4,500-$5,000 range by the end of October. However, it should be noted that if the price falls below the $3,550 support level, it may trigger a further correction to $3,000-$3,200. Currently, the market generally focuses on the strong support zone of $3,800 to $3,900 and whether it can effectively break through the key resistance zone of $4,100.  

Regarding the core narrative of the market, crypto KOL Yuzhong Kuangshui (Rainy Day Rant) believes that the main theme of the crypto market in the next three to five years will revolve around "adoption", and stablecoins have the greatest potential to become the core narrative. He mentioned that savings activities are popular due to low risk and high returns, while the speculation of stablecoin infrastructure tokens carries higher risks. However, the sharp fluctuations in the market also bring risks and lessons. When reviewing the "October 11 crash", the founder of Wintermute pointed out that the plunge was triggered by specific news and amplified by high leverage and flaws in trading mechanisms. In the future, liquidity may further concentrate on mainstream assets such as Bitcoin, Ethereum, and Solana, while the popularity of altcoins and meme coins may decline in the short term. Joshua Deuk, Trading Director of Mozaik Capital, also believes that market confidence has been hit and the market may enter a period of volatile accumulation in the short term.  

# 2. Key Data (as of 13:00 HKT on October 20)  

(Data sources: Coinglass, Upbit, Coingecko, SoSoValue, Tomars)  

- Bitcoin: $111,125 (+18.78% YTD), daily spot trading volume of $56.57 billion  

- Ethereum: $4,075 (+22.1% YTD), daily spot trading volume of $34.77 billion  

- Fear and Greed Index: 29 (Fear)  

- Average GAS: BTC: 1 sat/vB, ETH: 0.108 Gwei  

- Market Share: BTC 59.61%, ETH 12.48%  

- Upbit 24-Hour Trading Volume Ranking: ZBT, XRP, ETH, BTC, SOL  

- 24-Hour BTC Long-Short Ratio: 49.3% / 50.7%  

- Sector Gains/Losses: L2 sector up 10.2%, Meme sector up 6.9%  

- 24-Hour Liquidation Data: A total of 122,150 people were liquidated globally, with a total liquidation amount of $509 million, including $177 million in BTC liquidations, $170 million in ETH liquidations, and $33.95 million in ENA liquidations  

- BTC Mid-to-Long-Term Trend Channel: Upper channel line ($113,279.91), lower channel line ($111,036.75)  

- ETH Mid-to-Long-Term Trend Channel: Upper channel line ($4,095.13), lower channel line ($4,014.04)  

*Note: When the price is higher than the upper and lower boundaries, it indicates a mid-to-long-term bullish trend; otherwise, it is a bearish trend. When the price is within the range or repeatedly crosses the cost range in the short term, it indicates a bottom-building or top-building state.*  

# 3. ETF Flows (as of October 17)  

- Bitcoin ETFs: -$367 million, with net outflows for 3 consecutive days  

- Ethereum ETFs: -$232 million, with none of the 9 ETFs recording net inflows  

# 4. Today’s Outlook  

- Binance Alpha will list SavannaSurvival (SVSA) on October 20  

- Binance Alpha will list SigmaDotMoney (SIGMA) on October 21  

- Binance Futures will delist SLERFUSDT U-Margined Perpetual Contract and CHZUSD Coin-Margined Perpetual Contract on October 21  

- The Federal Reserve will hold a Payment Innovation Conference to discuss stablecoins, artificial intelligence, and tokenization, with Federal Reserve Governor Christopher Waller delivering the opening remarks. (21:00 on October 21)  

- LayerZero (ZRO) will unlock approximately 25.71 million tokens at 7:00 p.m. on October 20, accounting for 7.86% of the current circulating supply, with a value of about $44.2 million;  

- KAITO (KAITO) will unlock approximately 8.35 million tokens at 8:00 p.m. on October 20, accounting for 3.06% of the current circulating supply, with a value of about $8.7 million;  

- Top Gainers among Top 100 Cryptocurrencies by Market Cap Today: SPX6900 up 15.6%, ASI Alliance up 13.8%, Zcash up 12.6%, HEX up 11.9%, Mantle up 11.7%.  

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