Under the regulatory tailwinds brought by Trump's election, Bitcoin has successfully broken through its historical high. With the increasing market attention, various key indicators suggest that the strong momentum of this bull market is expected to continue.
As we predicted in September, Bitcoin (BTC) price experienced high volatility and surged after the election. Now, Bitcoin has entered uncharted territory without technical price resistance, and we believe the next stage of the bull market has just begun.
This pattern is similar to 2020, where Bitcoin price doubled by the end of the year and further increased by about 137% in 2021. With the government's significant shift in its supportive attitude towards Bitcoin, investor interest is rapidly growing. Recently, we have seen a surge in investment inquiries, and many investors realize that their allocation to this asset class is clearly insufficient. Although we are closely monitoring the market for signs of overheating, we reiterate our price target of $180,000/BTC for this cycle, as the key indicators we track continue to show bullish signals.
Bitcoin Price Trend
Market Sentiment
Bitcoin's 7-day moving average (7 DMA) has reached a new all-time high of $89,444. On Tuesday, November 5th, election night, Bitcoin surged about 9% to a new all-time high of $75,000. This is consistent with our previous observation that Bitcoin prices tend to rise when the likelihood of Trump's victory increases. Trump has explicitly promised to end the SEC's "enforcement-focused" regulatory strategy and make the US the "capital of crypto and Bitcoin".
After Trump's election as president, regulatory resistance has turned into a driving force for the first time. Trump has already begun appointing crypto-friendly officials in the executive branch, and with the Republican Party controlling the unified government, the likelihood of relevant supportive legislation being passed has increased. Key proposals include plans to establish a national Bitcoin reserve and rewrite legislation related to crypto market structure and stablecoins, with FIT21 expected to be rewritten in market and privacy-friendly terms, and new stablecoin bills allowing state-chartered banks to issue stablecoins without Federal Reserve approval.
As countries like the BRICS are exploring alternatives like Bitcoin to circumvent US dollar sanctions and currency manipulation, stablecoins provide a strategic opportunity for the US to project the global influence of the dollar. By eliminating regulatory barriers and allowing state-chartered banks to issue stablecoins, the US can maintain the global impact of the dollar and leverage the faster adoption of cryptocurrencies in emerging markets, which have a strong demand for financial services, hedging against local currency inflation, and decentralized finance (DeFi).
We expect the SAB to be repealed in the first quarter of Trump's term, if not by the SEC, then by Congress, which will prompt banks to announce crypto custody solutions.
Furthermore, by 2025, the United States' Ethereum (ETH) ETF will be revised to support staking, the SEC will approve Solana (SOL) ETF's 19b-4 proposal, and physically-backed and redeemable ETFs will make these products more tax-efficient and liquid. Given Trump's previous acknowledgment of the commonalities between Bitcoin mining and energy-intensive artificial intelligence (AI), energy regulations are expected to be relaxed, making baseload power (such as nuclear) cheaper and more abundant, thereby driving the United States' global leadership in energy, AI, and Bitcoin.
This election marks a bullish turning point, reversing the capital and employment outflows caused by the previous hawkish policies. By stimulating entrepreneurial dynamism, the United States is poised to become a global leader in crypto innovation and employment, transforming cryptocurrencies into a key domestic growth industry and an important export product for emerging markets.
Bitcoin Dominance
The 7-day moving average of Bitcoin dominance (a metric measuring Bitcoin's market capitalization relative to the total cryptocurrency market capitalization) rose 2 percentage points this month to 59%, reaching its highest level since March 2021.
While this upward trend, which began from 40% in November 2022, may continue in the short term, it is likely to peak soon. In September, we noted that a Harris victory could boost Bitcoin's dominance due to a clearer regulatory stance on Bitcoin as a commodity.
In contrast, Trump's pro-crypto stance and his expanded cabinet team may drive more widespread crypto market investment. As Bitcoin reaches new highs in a crypto-friendly regulatory environment, the wealth effect and reduced regulatory risk are expected to attract native capital and new institutional investors to DeFi, boosting the returns of smaller projects in the asset class.
Regional Trading Dynamics
At first glance, traders in the Asian market trading session appear to have significantly increased their Bitcoin holdings this month, contrary to the recent trend of Asian traders typically being net sellers while European and US traders are net buyers.
However, the spike in Bitcoin prices on election night occurred during the Asian trading session, likely due to a large number of US investors trading around the election. This specific event makes it difficult to fully attribute such price movements to regional dynamics. Consistent with historical behavior, traders in the US and European trading sessions continued to increase their Bitcoin holdings, maintaining the price performance trend observed in October.
Key Indicators
To assess the potential upside and duration of this bull market cycle, we analyzed several key indicators to gauge the market's risk level and potential price tops. This month, our analysis starts with perpetual futures (perps), where the performance of funding rates provides insights into market sentiment and helps measure the likelihood of market overheating.
Bitcoin prices typically exhibit signs of overheating when the 30-day moving average of perpetual funding rates (30 DMA Perp Funding Rates) exceeds 10% and persists for 1 to 3 months.
Since April 2020, we have analyzed the periods when the 30-day moving average perpetual futures funding rate exceeded 10%. The average duration of these periods is approximately 66 days, with an average gain from open to close of 17%, although the duration of individual periods varies significantly. The only exception was the single-day spike on June 18, 2024, reflecting short-term market sentiment. Other instances have persisted for weeks, highlighting structural bullish sentiment, which typically leads to significant short-to-medium-term gains.
For example, the high funding rate period that began on August 31, 2021, lasted for 23 days, followed by a 28-day cooling-off period, and then resumed for another 51 days on October 19.
If this brief interval is included, the total duration of the high funding rate period in 2021 was 99 days. Similarly, the current high funding rate period that began on November 12, 2024, has lasted for 80 days, followed by a 19-day interval, and then resumed for another 69 days, totaling 168 days, comparable to the 186 days from November 11, 2020, to May 21, 2021. Notably, when Bitcoin is purchased on days when funding rates exceed 10%, the average returns within 30-day, 60-day, and 90-day time frames are higher than on days with lower funding rates.
However, the data shows that over longer time horizons, the performance tends to be subpar. On average, Bitcoin purchased on days when funding rates exceed 10% underperforms the market starting from the 180-day mark, and this trend becomes more pronounced at the 1-year and 2-year time frames. Given that market cycles typically last around 4 years, this pattern suggests that sustained high funding rates are often associated with cycle tops and may serve as an early signal of market overheating, indicating a higher risk of long-term downside.
Bitcoin Cycle Analysis
As of November 11, BTC has entered a new phase, with the funding rate once again exceeding 10%. This shift indicates stronger momentum in the short to medium term, as historically, higher funding rates have been associated with higher 30-day, 60-day, and 90-day returns, reflecting higher bullish sentiment and demand. However, as the funding rate remains elevated, we may depart from the stage that is equally favorable for long-term (1-2 year) returns. Given the current supportive regulatory environment for BTC, we expect another high-performance period to emerge, similar to the one following the 2020 US elections, when sustained funding rates above 10% drove a 260% growth in 186 days. With BTC currently trading around $90,000, our $180,000 target price remains viable, reflecting a potential cycle return of around 1,000% from the cycle bottom to the peak.
Higher 30-day moving average (DMA) relative unrealized profit levels (>0.60 and 0.70) have historically often signaled the top of BTC prices.
Comparison of BTC Average Earnings and 30-day Moving Average Relative Unrealized Profit (RUP) (November 13, 2016 - November 13, 2024)
Next, we focus on the Relative Unrealized Profit (RUP), which is another important indicator for assessing whether the BTC market is overheated. RUP measures the proportion of the total BTC market capitalization that is made up of unrealized gains (i.e., paper profits that have not yet been realized through sales). As BTC prices rise above the last purchase price of most holders, this metric rises, reflecting more of the market entering a profit-taking state, thereby reflecting bullish market sentiment.
Historically, high 30-day moving average (DMA) RUP levels (especially above 0.60 and 0.70) have often signaled strong and potentially overheated market sentiment. As shown by the red zones in the chart, when the 30-day DMA RUP exceeds 0.70, it often coincides with market tops, as the high proportion of unrealized profits triggers more profit-taking. Conversely, when the RUP level falls below 0.60, it indicates more favorable market conditions for long-term buying, with historical data showing higher 1-year and 2-year returns when buying below this threshold.
Analysis of the past two market cycles shows that 30-day DMA RUP levels between 0.60 and 0.70 typically deliver the highest short-term to medium-term returns (7 days to 180 days). This range usually reflects the mid-stage of a bull market, where bullish sentiment is rising but has not yet reached excessive levels. In contrast, when RUP exceeds 0.70, returns across all time frames exhibit a negative correlation, reinforcing its role as a strong sell signal.
As of November 13, BTC's 30-day DMA RUP is around 0.54, but the daily value has exceeded 0.60 since November 11. According to our detailed data, when RUP approaches 0.70, the risk gradually increases, emphasizing the importance of short-term trading within the 0.60 to 0.70 range. However, if the 30-day DMA RUP rises to near 0.70, it may signal an overheated market, warranting caution for long-term positions.
US Region "Cryptocurrency" Search Trends
The search interest for "cryptocurrency" as a Google search term is an important indicator of retail interest and market momentum. Historical data shows that peaks in search interest have typically coincided with peaks in the overall cryptocurrency market capitalization. For example, the search interest peaks in May and November 2021 were followed by significant market declines: a roughly 55% pullback in the two months after the May peak, and a bear market of around 12 months and 75% total decline after the November peak.
Currently, the search interest is only 34% of the May 2021 peak, slightly lower than the 37% regional peak observed in March 2024 (when BTC reached the highest price of the current cycle). This relatively low search interest suggests that BTC and the broader crypto market have not yet entered a speculative frenzy stage, leaving room for further growth without reaching the mainstream attention levels typically associated with market tops.
Coinbase App Store Ranking
Similar to Google's search interest in "cryptocurrency," Coinbase's ranking in the app store is also an important indicator of retail investment interest. On March 5 this year, after BTC price surged about 34% in 9 days and retested its 2021 all-time high of around $69,000, Coinbase re-entered the top 50 app store rankings. Although BTC reached a new high of around $74,000 later that month, as price volatility declined into the summer doldrums and public attention shifted to the presidential election, retail interest waned. However, BTC's breakthrough on election night reignited retail interest, with Coinbase's app store ranking soaring from #412 on November 5 to #9 on November 14. The surge in engagement has driven further price appreciation, setting a new record for BTC ETF inflows.
BTC Network Activity, Adoption and Fees
Daily Transactions: The 7-day moving average of daily average transactions is around 543,000, down 15% from the previous quarter. Despite the decline, activity remains robust, at the 96th percentile of BTC's historical range. While transaction count has decreased, larger transaction loads have offset this, as evidenced by the rise in transfer volume.
Ordinals Inscriptions: Daily Ordinals (NFTs and memecoins on the BTC blockchain) transactions grew 404% quarter-over-quarter, reflecting a resurgence of speculative fervor driven by price appreciation and regulatory tailwinds.
Total Transfer Volume: BTC transfer volume grew 118% quarter-over-quarter, with a 7-day moving average of around $85 billion.
Average Transaction Fees: BTC transaction fees declined 5% month-over-month, with an average fee of $3.58 and an average transaction value of around $157,000, corresponding to a fee rate of approximately 0.0023%.
BTC Market Health and Profitability
Profitable Address Ratio: With BTC price reaching new highs, approximately 99% of BTC addresses are currently in profit.
Net Unrealized Profit/Loss: This ratio has increased 21% over the past month, reaching 0.61, indicating a significant improvement in the relative balance of unrealized profits and unrealized losses. As a sentiment indicator, this ratio is currently in the "Belief-Denial" zone, corresponding to the rapid expansion and contraction phase between market cycle peaks and troughs.
BTC On-Chain Monthly Dashboard
BTC Miners and Crypto Market Capitalization
Mining Difficulty (T):
BTC's block difficulty has risen from 92 T to 102 T, reflecting miners expanding their rigs and upgrading their equipment queues. The BTC network automatically adjusts the difficulty every 2,016 blocks (about two weeks) to ensure each block is mined in approximately 10 minutes. The increase in difficulty indicates heightened competition among miners, which also signifies a robust and secure network.
Miner Daily Total Revenue:
Miner daily revenue grew 30% quarter-over-quarter, benefiting from the BTC price appreciation, but BTC-denominated transaction fees declined 30%, impacting total revenue to some extent.
Miner Transfers to Exchanges:
On November 18, miners transferred around $181 million worth of BTC to exchanges, about 50 times the prior 30-day average, driving the 7-day moving average up 803% quarter-over-quarter. This extreme movement is the highest level since March, similar to the period before the last BTC halving. While the sustained high miner-to-exchange transfer volume may indicate an overheated market, this peak occurred after the summer miner sell-off at lower prices, suggesting this is for operational and growth purposes, rather than a market top signal.
Crypto Stock Market Capitalization:
The 30-day moving average of the MarketVector Digital Assets Stock Index (MVDAPP) rose 47% quarter-over-quarter, outperforming BTC. Major index constituents like MicroStrategy and Bitcoin mining companies, through their BTC holdings or mining operations, directly benefit from the BTC price appreciation. Meanwhile, companies like Coinbase leverage the broader crypto market gains, as the price appreciation drives expectations for increased trading fees and other revenue sources.
