Author: 0x Weilan
The market, project, and cryptocurrency information, opinions and judgments mentioned in this report are for reference only and do not constitute any investment advice.
BTC has jumped onto the upward trend line, and the bull market's second half has started after a consolidation period of 8 months.
Market Summary
This week is the most important week of 2024. Prices and volumes have risen, and BTC has returned to the upward trend line after 8 months of adjustment, kicking off the second half of the bull market.
This week, BTC opened at $68,736.40 and closed at $80,428.92, surging 17.01% for the week with increased trading volume. In October, BTC conquered the 200-day moving average, and this week it surged again, completely breaking free from the "new high consolidation area" and reaching the bull-bear dividing line (the blue line in the chart, around $75,000).
Accompanied by a large influx of capital, the breakthroughs of these two technical resistances mark the complete start of the second half of the bull market.
The main driver for this week's market rally is the conclusion of the US election.
Donald Trump was elected the 47th President of the United States, and his "tax cuts" and "deregulation" are believed to significantly boost the profitability of US companies. Coupled with the increased liquidity from the rate cut cycle, the US stock market is likely to continue rising in the medium to short term.
The Fed and Economic Data
After the US election, the Federal Reserve, which had postponed its meeting by a day, announced another 25-basis-point rate cut. The Fed also stated that it will orderly push interest rates to a market-neutral level. Based on market performance, market participants have fully priced in a "soft landing" for the US economy. At the same time, because Trump won, his economic policies are expected to raise inflation to some extent, making it very difficult for interest rates to fall below 2%. In its statement, the Fed also no longer mentioned the 2% inflation target. In 2025, the market is likely to face relatively high inflation, which will limit the room for further rate cuts.
Previously, we mentioned in our research report that the market was trading around the soft landing or hard landing scenario, but as the election approached, the "Trump trade" became mainstream, and after an appropriate adjustment, the US stock market surged significantly this week. The Nasdaq, Dow Jones, and S&P 500 recorded gains of 5.74%, 4.61%, and 4.66%, respectively. The US dollar index rose further by 0.63% to 104.9569%, London gold fell 1.85%, and US bond yields stopped rising.
We believe that with the Republican Party's victory, a new consensus is forming, and the market is very optimistic about the future development of the US stock market. Traders are learning to bet on performance-strong targets in a low-tax, low-interest-rate financial environment, even with potentially slightly higher inflation.
Stablecoins and ETFs
The strong performance of the US stock market has provided strong support for the inflow of funds into BTC ETFs.
This week, the crypto market saw a massive inflow of $6.504 billion, the largest weekly inflow in 2024. Among them, BTC ETFs received $1.728 billion in inflows, and stablecoin channels saw $4.776 billion in inflows.
The significant inflow of funds through the stablecoin channels has enabled the BTC's bullish momentum to continue in the Altcoin market. ETH, which had been severely FUDed, recorded a weekly gain of 29.52%. The MEME Coin Doge with the Musk concept even surged 83.49%.
Although BTC has recorded a huge gain, the previous adjustment lasted for 8 months. Currently, the short-term profit level is around 16%. So, although the price has reached a new all-time high, the selling pressure is still far lower than when the new high was first set in March. Considering the rampant influx of market funds and the generally optimistic outlook for the future, BTC's price may continue to rise without fear of technical indicator resistance.
Cycle Indicators
The EMC BTC Cycle Metrics indicator is 0.875, indicating that the market is in an upward phase and in a relatively strong upward state.
END
EMC Labs (Emergence Labs) was founded in April 2023 by crypto asset investors and data scientists. It focuses on blockchain industry research and Crypto secondary market investment, with industry foresight, insight, and data mining as its core competencies, committed to participating in the thriving blockchain industry through research and investment, and promoting blockchain and crypto assets to bring well-being to humanity.
For more information, please visit: https://www.emc.fund
