Author: WOO
Background: BTC $73,000, may be the bottom support price of this round
BTC broke out of the range that had been consolidating for nearly half a year on 11/6, from $73,000, which is closely related to Trump's victory and the start of the interest rate cut cycle.
Trump's victory: He promised to announce many crypto-friendly policies before the election, including making the US the global capital of cryptocurrencies, firing the current SEC chairman, etc. Although it is uncertain whether he can fulfill his promises after taking office, it is foreseeable that the crypto market has often faced regulatory pressure in the past, and this situation will be alleviated after Trump takes office, which is undoubtedly a major factor driving the market upward.
The interest rate cut cycle has started: Interest rate cuts mean that the US is releasing more liquidity into the risk market, which theoretically will lead to a rise in the stock market and other asset classes such as foreign currencies. As the highest-risk and relatively smaller-cap BTC, it can also benefit from this. The market reaction to the November interest rate cut in the traditional finance sector was positive, with the S&P closing at a new high and the bond market rising. However, the transmission of liquidity often takes time, and Q4 2024 is the opportunity for the crypto market to absorb the spillover liquidity.
From the policy side to the release of liquidity, we are currently in the "early bull" period. Due to the characteristic that the previous high point of BTC is the bottom of the new round, we can boldly assume that BTC $73,000 is the support price of this round of bull market.
The support has been confirmed, so how high can the BTC price go in this bull market? WOO X Research will explore it for you.
BTC vs. other mainstream asset market cap: $110,000 to $220,000
The current BTC market cap is $1.6 trillion, surpassing Meta last month and ranking ninth globally. Since the approval of the BTC spot ETF in January this year, BTC is no longer seen as a niche asset, but has risen to a mainstream asset. With the help of Trump's election, BTC has entered the public's vision, and its growth potential can now be compared with other mainstream assets.
As is well known, BTC is also called digital gold, and its current market cap is about 9% of gold. The following simulates several scenarios to estimate the possible future price of BTC:
If the BTC market cap reaches 25% of gold, which is $4.5 trillion, the price will reach $227,162
If the BTC market cap is the same as NVIDIA, the price will reach $183,645
If the BTC market cap surpasses Google and ranks fifth, the price will reach $111,730
In terms of market cap, BTC is expected to break into the top five global assets in this bull market, with a predicted top price range of $110,000 to $220,000.
BTC top indicator: Top at least $200,000
This indicator uses two sets of data to make judgments:
Two-year moving average (730 days, green line)
Five times the two-year moving average (red line)
The usage is as follows:
When the BTC price is below the two-year moving average (green line), it is a good time to buy BTC
When the price exceeds five times the two-year moving average (red line), this is a signal to sell BTC
How to interpret this indicator? It represents whether the short-term price has broken through/fallen below the average price of long-term holders. The bottom benchmark is the average price of the past two years. If it is below the green line, it means that it has fallen below the low point of the past two years, which is a sign of excessive panic, and this is a good long-term buying opportunity.
The red line is five times the average price of the past two years. Once it is broken through, it means that the market is too FOMO, which is often a sign of overheating, suitable for selling.
Reviewing the historical price performance of BTC, this rule is largely consistent. According to the information in the figure, on 11/6, the BTC price was around $75,000, and the red line price was $207,977, and the BTC price has been hitting new highs recently, and the red line price will also rise. This indicator shows that the top price of this round will be at least $200,000.
Pi Cycle Top Indicator: Top at least $110,000
This indicator uses two sets of data to judge whether BTC is in an overheated state:
111-day moving average (111DMA, red line)
Twice the 350-day moving average (350DMA x 2, green line)
The usage is as follows:
When the 111-day moving average turns upward and breaks through twice the 350-day moving average, it usually means that the BTC price has reached the top, which is a sell signal.
How to interpret this indicator?
The implication of the Pi Cycle Top Indicator is to observe whether the short-term price has broken through the average price of long-term holders, and to judge the degree of market overheating based on this. When 111DMA (red line) breaks through 350DMA x 2 (green line), it usually means that the market is overly optimistic, with FOMO (fear of missing out) sentiment, which is often a sign of overheating, suitable for considering selling.
According to the latest chart information, on November 6, 2024, the BTC price was around $75,621, and the 350DMA x 2 price was around $117,390. This indicates that when the BTC price approaches or exceeds this level, it may be a top signal for this round of the market.
