Over the past week, BTC has continued to rise, successively breaking through $96,000, $97,000, $98,000, and $99,000 ATH. The market's attention to BTC has returned to its peak, and it is eagerly awaiting BTC to break through $100,000. Not only has the BTC Google search index risen sharply, but Microstrategy has also used its over-allotment option for its convertible bonds, and its MSTR due in 2029 broke through $104 on the first trading day.
On the 23rd, after BTC broke through the $99,588 ATH, the market lacked the strength to rise and fell back and forth to around $95,734, although it rebounded to around $98,000, but BTC entered a downward channel in the late night of the 25th, with the lowest reaching $92,326.31, a 24-hour maximum decline of 6.5%. Currently, the BTC price is fluctuating around $93,000 (the above data is from Binance spot, 5:00 pm on November 26).
Although BTC has experienced the largest correction in nearly half a month, the crypto market has not reacted as violently as before, not only has ETH not followed the decline, but most altcoins have not entered a crash, and some even have slight gains. With Trump about to take office, BTC investors taking profits, and the complex leverage effect, the volatility of BTC in the future market may further increase.
BTC technical indicators have entered a short-term overbought stage, and some long-term holders have taken profits
Since Trump's victory, BTC's technical indicators have shown a serious overbought state. And before this week, BTC was the only investment target in Trump's economy that had not yet taken profits. As the public's FOMO sentiment intensified, many long-term holders chose to cash out. Crypto Banter analyst Kyledoops pointed out that long-term BTC holders have sold 128,000 BTC, although BTC ETFs have absorbed 90% of the selling pressure during the same period.
The market's FOMO sentiment is too high, and the BTC price correction may be beneficial to the future development
Microstrategy exercised a $400 million over-allotment option on the basis of a $2.6 billion convertible bond (0% coupon, 55% premium), increasing the final scale to $3 billion. This batch of convertible bonds due in 2029 broke through $104 on the first trading day.
At the same time, the market has also quickly launched Microstrategy's leveraged ETFs (MSTX, MSTU), allowing retail investors to have more "suboptimal" ways to leverage trade BTC spot. According to a Bloomberg report, the demand for these leveraged ETFs has put pressure on the prime brokers responsible for securities lending, and the related asset management scale has surged to nearly $5 billion in the past week.
The public opinion is also continuously increasing the visibility of BTC, with a well-known TV commentator suddenly changing his mind to support cryptocurrencies and advising investors to hold BTC at the high point. The market's FOMO has further exacerbated the recent market bubble, resulting in a significant increase in leverage at the current level and a sharp rise in actual volatility.
Macro interpretation
Strong US economic indicators, the possibility of a soft landing in the US economy increases
Data shows that more than $448 billion has flowed into the US stock market this year, breaking the record of 2021 and reaching an unprecedented level, and at the same time, Nvidia's financial report exceeded expectations, and the US stock market remains strong. The economic index has rebounded to the strong first quarter level, and the inflation data has not yet broken through upwards, the high-income consumer index has hit a new high, and the consumption power of the US (high-income) group is still strong. From the data, the possibility of a soft landing in the US economy has increased.
The conflict between Lebanon and Israel is approaching the end, and risk-averse funds are withdrawing
The conflict between Lebanon and Israel is approaching the end, and risk-averse funds are withdrawing. In addition to the cryptocurrency market, the overnight gold, crude oil and other commodity markets have also experienced a sharp decline. As of the close of the night session on November 25, London gold spot, London silver spot, COMEX gold, COMEX silver and other markets all fell more than 3%.
CCTV News reported that on November 25, local time, Matthew Miller, a spokesman for the US State Department, said in a briefing that the ceasefire agreement "has not yet been reached", and the US believes that the differences between the two parties on the ceasefire agreement have "narrowed significantly", but some measures still need to be taken to promote its conclusion. The US is "doing its utmost" to push the negotiations.
On the 25th local time, Lebanon's MTV television station released an exclusive news that Lebanon has received a ceasefire notice from Israel and will announce it tomorrow evening. According to a report by The Times of Israel, Israel has in principle agreed to a ceasefire agreement with Hezbollah in Lebanon with US support.
Trump's tariff remarks caused a huge shock in the foreign exchange market
On the 25th local time, Trump said that he would impose a 25% tariff on all products entering the US from Mexico and Canada. As soon as the news came out, the currencies of Canada and Mexico fell more than 1% against the US dollar, exacerbating the volatility of the foreign exchange market, which has a daily trading volume of up to $7.5 trillion. Emerging market currencies generally weakened. Commodity currencies such as the Australian dollar and New Zealand dollar fell. Asia-Pacific stock markets were also under pressure, with across-the-board declines.
Market Suggestions
The current market FOMO is still high, and it is recommended that investors maintain rationality under the condition that the overbought state has not been significantly alleviated, and make proper asset allocation while ensuring risk control to capture returns and further avoid risks. At the same time, given that Trump has directly conveyed his unfiltered ideas and policy intentions through social media in the past, the market will be full of a lot of speculation and contradictory trading ideas, and maintaining the flexibility of asset allocation is also very important.
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