News and analysis

Neo (NEO) has dropped 8.2% to $10.00 this week, underperforming Bitcoin (BTC), which declined by 2.5% to $66,980. Despite this drop, NEO's price has formed an ascending triangle pattern, signaling potential for an upward move that could push prices above $12.50, possibly even as high as $13.40, which marks the middle of the ascending channel.

This ambitious target is supported by the increased security of Neo's sidechain, Neo X, which adds further confidence to the upside scenario. However, for this scenario to materialize, NEO must hold above the $10.00 support level, as breaking below could invalidate the pattern and limit further gains.

The first and largest cryptocurrency had again failed to cross over the major psychological border at $70,000 just a few days ago. We feel it was a good try anyway, and not the last one before the year's end, even though the mid-summer rollback repeated itself. The current week is clearly a time for retracement, with a potential for Bitcoin price to slide somewhere into the area near 65,000 or slightly below. Yet, the fundamentals behind our estimates of future developments whisper that the crowd of crypto traders would barely step into the same river twice, as this is not the same river anymore. Increased market bets that Donald Trump is going to win the 2024 elections mean a high likelihood of another attempt to hit multi-month highs as political factors probably formed the main driver for Bitcoin's ascending from its local dips below 60,000 to nearly 70,000 in October. Public polls show it's rather neck and neck race between Republican and Democratic nominees, but Wall Street got its own beliefs.

The point is that "Harris stocks" generally include renewable energy, electric vehicles, healthcare and defence segments, which are in a low or uncertain mood during the last couple of weeks when the S&P 500 and especially the Dow Jones Industrial Average are growing. A very fresh example of losing ground by Lockheed Martin weapon contractor could be noted. Typically "Trump stocks" like oil and manufacturing enterprises are feeling much better, as well as some of his former personal favourites like Oracle. Our conclusion at the moment is that money reallocation signs in the real world hints at least a 60% chance of Trump's victory, with supposedly a 40% chance for Joe Biden's vice-president Kamala Harris to take his chair in the White House for the next term.

And what does it mean for Bitcoin prospects? The Democratic administration has reputations of crypto haters. A set of high-profile lawsuits from the Department of Justice and the Securities and Exchange Commission has polluted the air for the industry. Harris was trying to distance herself from Biden's heritage when she briefly touched on the subject of improving a regulatory framework for crypto. This also offered support for a potential crypto rally in case of her victory, but she didn't give details of such plans. If markets would agree with polls to change positioning for a tight presidential election, then "with clear policy statements supporting crypto from the Harris campaign, the market seems less worried about downside and finds it attractive to bid here. Bitcoin ETF inflows, crypto equity markets and retail trading sentiment is screaming ‘risk-on’,” Bernstein noted this weekend. But Bitcoin lovers already transformed into Trump supporters as Trump more clearly called many times on a largely pro-crypto stance, even promising to build the future of U.S. governmental reserves on Bitcoins in America. His election campaign even accepts donations in crypto.

Bitcoin becomes a so-called Trump trade. Thus, if he wins, Bitcoin may reach $100,000 in nine to twelve months. Bloomberg wrote on October 22 that Bitcoin options traders eye $80,000 no matter who wins U.S. election, just increasing bets that Bitcoin will reach this record high by the end of November. "The open interest... for the call contracts expiring on Nov. 29" is focused around $80,000 with the second most popular strike price at $70,000, the article said, while the open interest for the calls expiring on Dec. 27 "is clustered around $100,000 and $80,000", while "the most popular strike price of the calls expiring on Nov. 8 is at $75,000". Further rate cuts "are seen contributing to the optimism". In other words, the global depreciation of the buying power of the entire currency basket in relation to the whole variety of goods and services, combined with the need for businesses to bypass restrictions, are favouring Bitcoin's rally. The Greenback strengthened this month on expectations of rather moderate 0.25% rate cut steps at the November and December meetings by U.S. central bankers. This only smoothed the crowd's aspiration to climb higher on Gold and Bitcoin, but did not cancel its desire to own more digital money instead of traditional money.

And if so, we now may sing along with Nobel Laureate Bob Dylan who famously called everybody to admit that "the waters around you have grown" and that "soon we’ll be drenched to the bone", while feeling "better start swimming or you’ll sink like a stone for the times they are changing". It's probably a time to recognize the new realities to avoid just sitting on the sidelines when the crypto movement would start gaining momentum.

ApeCoin (APE) is down 12.2% to $1.2300 this week, retreating after a sharp 141.9% surge during October 19-21. In comparison, Bitcoin (BTC) is also declining by 3.4% to $66,400.

APE’s price surge over the weekend was driven by the release of Apechain on October 19, which enables cross-chain transactions across Ethereum, Arbitrum, and ApeChain networks for assets like ApeCoin (APE), Wrapped Ethereum (WETH), USD Coin (USDC), Tether (USDT), and Dai (DAI). A key factor behind this rise is the incorporation of LayerZero’s Omnichain Fungible Token (OFT) standard into the ApeChain mainnet. LayerZero, a cross-chain interoperability protocol, allows APE to serve as a governance token for the ApeCoin DAO and handle transaction fees across multiple blockchains.

This integration boosted investor confidence and spiked demand for APE, but the rapid rise led to an overbought condition, causing a pullback. To resume upward momentum, APE needs to maintain support above $1.0000, which could pave the way for a climb towards the $1.5000 resistance.

This is exactly what nearly every heart in the market should have anticipated, and so, this finally happened. NVIDIA stock has gone onto new highs, meaning the Wall Street community enters the next stage of the AI-led rally. A gradual preparation was conducted thoroughly in the previous two weeks, when NVIDIA charts shaped a proper technical basis to consolidate at a stone's throw distance from historical peaks, generally between $130 and $140 per share. The phase of a remote bullish fire took effect. The Wall Street crowd grew accustomed to purchasing shares of the AI flagship despite continuous price hikes. As a result, most funds and private traders simply refrained from profit-fixing temptations at a crucial moment when the chip rebels' captain firm soared through the former sky to reach fresh Himalayan peaks around $144.

Contributing to this rally Taiwan Semiconductor (TSM) announced a remarkable 54% growth YoY in its quarterly profits only a few days ago. TSM immediately added double digits percentage to its market value. Reaching new levels by TSM shares, even against the background of regional geopolitical risks and U.S. export controls, gave a big hope for other global leaders of the chip segment. With the firm being one of NVIDIA's largest partners, TSM management noted late last week that AI demand is "real" and "sustainable", projecting a contribution from server AI processors to TSM's revenue would be "more than triple" in 2024.

News came from Microsoft (MSFT) as the second largest company in terms of market caps on Wall Street informed its shareholders about rising its orders for NVIDIA's Blackwell GB200 chips in the current quarter, from 400 to 1,450 racks. NVIDIA is launching Blackwell chip shipment in early 4Q24, with supposed volumes are about 150,000-200,000 units, planning 500,000 to 550,000 units in Q1 2025. Other large players like Dell are consumers of Blackwell chips as well, and many of them may follow Microsoft's example to buy more new-generation chips to promote AI options.

As to some latest estimates of the whole chip segment, many analysts are also brave and optimistic. One bright example is Dan Ives at Wedbuch who shared a view that overall AI infrastructure market opportunity "could grow 10x from today through 2027", with AI cap-ex spending around $1 trillion for the next generation of chips being "on the horizon over the next 3 years". This context can conjure up dreams of stratospheric heights like $180 or even $200 per share yet to come within the nearest 12 months. Yet, even humble targets just $10-15 above $150 per share may lead the S&P 500 broad market barometer to record levels well above 6,000 points, as soon as political dust after U.S. elections settles.