Original | Odaily Planet Daily
Author | Azuma
After the victory of Trump, the “coin ancestor”, the arrival of a bull market has become a foregone conclusion, but the rise of BTC still exceeded many people’s expectations.
Shortly after breaking through the $80,000 mark in the evening of November 10, just one day later, BTC broke through $89,000 in the early morning of November 12 - reaching a high of 89,575 USDT at one point, and it seems that it will continue to hit the $90,000 mark.
OKX real-time quotes show that as of the time of writing, BTC is currently trading at 89,032 USDT, up 10.02% in 24 hours, and only about 12.3% away from the 100,000 USD mark.
In addition to BTC, ETH has also surpassed the $3,300 mark, currently reported at 3,327.4 USDT, with a 24-hour increase of 3.7%; SOL has surpassed the $220 mark, currently reported at 221.27 USDT, with a 24-hour increase of 4.96% - judging from the race between these two major ecosystems, SOL seems to be about to hit new highs before ETH.
Other mainstream Alt-coins also saw an increase, but the increase varied in size. DOGE, with the power of Musk concept coin, rose by 22%, and is currently trading at 0.36 USDT; after OpenAI founder Sam Altman openly called out that he was confident in the bright future of cryptocurrency, the Worldcoin (WLD) he created rose by 28%, and is currently trading at 2.78 USDT...
In the US stock market, various Crypto concept stocks also rose fiercely. MicroStrategy (MSTR) once broke through the $360 mark and closed at $340, up 25.73%; Coinbase (COIN) closed at $324.24, up 19.76%.
Affected by the overall upward trend, the total market value of cryptocurrencies has also grown rapidly. According to CoinGecko data, the total market value of cryptocurrencies has exceeded 3.1 trillion US dollars, up 6% in 24 hours. Cryptocurrency users trading enthusiasm has also increased significantly. Alternatives panic and greed index reported 80 today, a new high since March this year, and the level has reached extreme greed.
In terms of derivatives trading, Coinglass data shows that in the past 24 hours, the entire network has been liquidated for $658 million. Although short orders still account for more than half of the liquidation, the scale of long orders is also as high as $280 million . In terms of currencies, BTC liquidated $251 million and ETH liquidated $87.59 million.
Long-term narrative: The bull market is back, aiming for 100,000
Regarding the story of the bull rally, we have already conducted a detailed analysis in the article Bitcoin hits a new all-time high, is $75,000 the starting point of the bull market?
In short, with Trumps victory, the industry predicts that the regulatory attitude towards cryptocurrencies will undergo a 180-degree turn, which will improve the development environment of the industry and lay the foundation for a new round of industry explosion.
The market reacted quickly to Trumps victory. SoSoValue data shows that during the election week (November 4-10, Eastern Time), the net weekly inflow of US dollars into the cryptocurrency market reached US$6.283 billion - among which, the net weekly inflow of US Bitcoin and Ethereum spot ETFs reached US$1.792 billion; the net weekly inflow of fiat-backed stablecoins (USDC, USDT, FDUSD, TUSD, PYUSD, USDP, GUSD) reached US$4.492 billion - a new high for a single week of net inflows since January 2022.
Many institutions and bigwigs have also given positive predictions about the future market. 100,000 US dollars seems to have become the next key point for BTC . We have also carefully sorted out various opinions in BTC officially enters the 80,000 US dollar era, is 100,000 far away?
Short-term possibility: After a sharp rise, beware of pullbacks
In this article, we would like to focus on the potential risk of a pullback, although this may be a topic that most investors are reluctant to face.
Overall, we believe that the current market is facing three main factors for correction.
Reason for callback 1: Policy fulfillment expectations
The first factor is the expectation of Trump’s policy implementation, that is, whether the industry can usher in the expected changes in the regulatory environment after Trump’s victory.
In this regard, various institutions also hold different views on the forecast - Forbes emphasized that although the market is generally optimistic, the extent of regulatory changes remains uncertain and will still depend on the policies of the White House and Congress; although investment bank TD Cowen believes that the regulatory environment will change as expected, it also emphasizes that the Trump teams focus is on extending tax cuts and resolving tariffs and trade issues, and cryptocurrency will not be its top priority, so the intensity and timing of policy implementation remain to be discussed.
There is also a more subtle situation here, that is, Trump will take office on January 20 next year, and there is still a window period of about 2 months from now when the outlook is relatively optimistic, but it cannot be actually implemented. Some cautious views believe that this means that the positive news has not yet been truly confirmed, but there are also optimists such as Matrixport who believe that this will give the market a few weeks to maintain this rally - relatively speaking, we are more inclined to the latter judgment, after all, confidence is the first productivity, and a few months is enough to complete a bull market.
In short, the implementation of policies will be the decisive factor in whether this round of bull market can be maintained, but considering the existence of the window period, the impact of this factor on the short-term market may not ferment for the time being. Relatively speaking, the latter two factors may have a more direct impact on the trend of the short-term market.
Reason for callback 2: Changes in the rhythm of “flooding”
The second factor is the impact of Trump’s victory on the Fed’s pace of interest rate cuts, that is, whether his victory will reduce the market’s previous expectations for interest rate cuts.
Previously, we have analyzed this factor in the article The most important indicator after the election: Will Trumps economic policy put an end to the Feds monetary easing?
Based on the latest market sentiment , many institutions have predicted that Trumps victory will directly lead to a reduction in expectations for Federal Reserve interest rate cuts before 2025 - the current probability of the Federal Reserve cutting interest rates by 25 basis points in December is 68%, while the probability before Trumps victory was about 83%.
This week, several Fed officials, including Powell (Friday 4:00 Beijing time), will make speeches intensively; in addition, the release of October CPI data (Wednesday 21:30 Beijing time) will also have a significant impact on the markets expectations of interest rate cuts. This may be the most critical factor affecting the subsequent market trend this week.
Reason for callback 3: gradually rising leverage ratio
The third factor is the gradually rising leverage ratio in the current market, which has objectively created conditions for large fluctuations in the market.
Coinglass data shows that the total open interest of Bitcoin futures contracts on the entire network has reached 594,500 BTC (approximately US$52.3 billion), continuously breaking historical highs; the nominal value of the total open interest of BTC options on the entire network is US$34.4 billion, also setting a historical high.
Since the position size of derivatives will be affected by the price of the underlying asset, considering that BTC has hit a new high, the actual leverage ratio may not have reached a new high level, but the current rising trend is still worthy of vigilance.
Looking back at past market trends, leverage is a booster for bull markets and also the trigger for extreme market conditions. Although we cannot predict market trends by “carving a boat to find a sword”, risk control is an eternal topic.
