Things are looking for crypto after bitcoin and ether have finally rallied enough to post October gains. Bitcoin is up 3.8% on the month, following a 2.8% drop last month, according to Coin Metrics. Ether has fared better, up 16.2% in October and recovering from a 14.6% drop in September. Prices have been unusually sideways for most of the month, but some investors see it as a boon. stability and resilience. Cryptocurrencies have two big market weeks to break through. Investors received a flurry of economic data this week, and the Federal Reserve raised interest rates by 0.75 percentage points for the fourth time on Wednesday afternoon. The midterm elections take place next week. However, investors say that while it may be too early to make a bottom, a recovery is in sight. “We may be testing this year’s lows again, but for the most part, we are near the bottom and I think more bad news is actually good news for crypto,” Steve McClurg said. “. Investment director at Valkyrie. “There’s an old adage, ‘don’t be against the Fed,’ and the Fed is still moving towards really tight monetary policy, but they’re getting close to the end of the tightening cycle,” he added. “That’s not to say they’re turning around and going the other way, but we’re starting to see some cracks in the economy that will likely turn them around at some point possibly in the near future.” McClurg also highlighted a recent move by $940 million worth of bitcoin investors to be removed from exchanges, calling it a typical bullish signal and an indicator that people are save their bitcoin instead of selling it. While central banks continue to attract investors’ attention, bitcoin’s case continues to grow for other market participants. Chris Kline, Bitcoin IRA co-founder, pointed to late-October news about France and Costa Rica, both of which are reevaluating their tax treatment of cryptocurrencies. He also highlighted the UK, which voted last week to recognize cryptocurrencies as a regulated financial instrument. “These are the things that did not rise to the top, but they are qualitative factors that will drive a strong crypto close this year,” he said. “It’s been a year of consideration and research. We’re starting to see the chart between now and 2023, which will be the year of action – and that’s where you’ll start to see that price volatility return. .” Greater appetite for ether The case for investing in ether is also growing. While bitcoin and ether continue to dominate crypto portfolios, investors have reduced their weighting of bitcoin in favor of ether and multi-asset products, according to a new study from CoinShares. James Butterfill, who led the research team there, attributes that change to the new, post-consolidation profitable quality of ether. The study, published October 27, focuses on fund managers with more than $330 billion in assets under management. Earlier this week, Bernstein said that a month and a half after the consolidation, the Ethereum network “is ready for a better economy.” “Ethereum needs very little recovery in economic activity for the token economy” — like gas fees and more revenue, burning tokens, said Bernstein digital asset analyst Gautam Chhugani. high announcements and “deflationary” states – to turn favorable, said Bernstein digital asset analyst Gautam Chhugani. In cryptocurrency terms, a deflationary asset is an asset whose supply is decreasing rather than increasing. Citi analysts agree that ether could head towards a deflationary future, as the cryptocurrency has experienced deflationary periods amid low network activity, analyst Joseph Ayoub said in a note. mean on Tuesday. He also noted that ether’s recent moves are driven by derivatives markets, with ETH open interest recently rising to its highest level since April, when the cryptocurrency was trading at 3,000. dollars. That makes it “one of the biggest divergences between price and open interest over the past three years, a sign that there could be even more volatility,” Ayoub said. “We adjust open interest on ETH price, noting that this is currently trading at an all-time high and in particular almost twice as high as the November 2021 high,” he said. said more. “This shows a high level of leverage in the derivatives market, possibly the tail beckoning the ‘spot price’ dog.”