After seven months of consolidation, the BTC spot ETF has seen an unusually large inflow of funds. Starting with a 50 basis point rate cut in mid-September, Federal Reserve Chairman Powell assured the market of an extended rate cut cycle, further accelerating the inflow of funds into the BTC spot ETF.
Driven by rising prices and increased media attention, BTC's strong momentum is expected to continue through December, attracting new investors. Optimism also surrounds the inauguration of President Trump on January 20, 2025, which could lead to a more favorable crypto regulatory environment, including the appointment of a new SEC chairman. Additionally, the expected announcement of $16.5 billion in repayments to FTX creditors may also support market sentiment. These factors create a favorable backdrop for continued bullish sentiment and BTC price stability.
By 2025, crypto assets will cross the 8% adoption threshold, a major inflection point that will lay the foundation for wider-scale adoption.
Among the key factors driving BTC to new highs this quarter, three major changes in the US regulatory landscape are most significant. First, on December 6, S&P Global may announce the inclusion of MicroStrategy in the S&P 500 index, prompting index funds to take positions. Second, on December 10, Microsoft will consider a proposal to invest in BTC, despite opposition from the board.
Previously, the National Center for Public Policy Research submitted a proposal based on the "2025 Plan" to evaluate BTC as an investment asset. Finally, starting December 15, 2024, the Financial Accounting Standards Board (FASB) will introduce new rules allowing crypto assets to be recorded at fair market value on company balance sheets, encouraging finance departments to include BTC on their balance sheets.
Historically, when BTC's Relative Strength Index (RSI) reaches overbought levels or the 30-day rolling return exceeds 40%+, its price often consolidates as the momentum cools. Given the recent overbought conditions, a brief consolidation phase may occur. However, many positive factors are gradually emerging.
Observing the current momentum of Bitcoin based on the 7-day rolling price change rate (in US dollars). As the BTC price has risen, the absolute price difference has increased, and the recent 7-day price increase of $19,265 is a record high, indicating an unprecedented strength of the rebound.
