Original | Odaily Planet Daily (@OdailyChina)
Author | Fu Ruhe (@vincent 31515173)
Yesterday, Bitcoin successfully broke through $104,000 and set a new historical record. Before the market could digest the joy brought by this price, Bitcoin started to decline today. OKX market data shows that the BTC price once dropped to $90,000 at 6 am this morning, with a maximum intraday decline of nearly 10%. As of the time of writing, the BTC price has rebounded to $97,700.
However, this short-term decline in Bitcoin did not significantly affect the trend of other Altcoins. Among them, SOL rebounded by 9% after a brief small decline, and other Altcoins such as ETH also rebounded after a slight decline.
After experiencing a surge and a plunge, can Bitcoin return to and stabilize above $100,000 this year? Will the long-awaited Altcoin season arrive smoothly?
Reason: Psychological Expectation of $100,000, Market Sentiment Needs to be Released
The violent fluctuations in this market are caused by multiple factors, with the core reason being the release of sentiment.
Why is the core reason in the sentiment? When the author was exposed to cryptocurrencies, someone said that Bitcoin would reach $100,000 in the future, and as time went on, this target price was mentioned more and more. Especially after Bitcoin broke through the high point of the previous bull market, $100,000 seemed to become an obsession in the minds of crypto investors. This caused most people to start taking profits after Bitcoin reached $100,000.
CryptoQuant analyst said that after BTC broke through the $100,000 mark, long-term Bitcoin holders (LTH) began to realize profits. CryptoQuant data shows that the "Long-Term Holder Spent Output Profit Ratio" (LTH-SOPR) has increased significantly, which measures the profit level of long-term Bitcoin investors by comparing the selling price with the price they initially paid.
Julio Moreno, head of research at CryptoQuant, said: "As the Bitcoin price has risen above $100,000, long-term holders (LTH) have been realizing profits. However, this is a normal phenomenon during the Bitcoin bull market, and profit-taking is still far from reaching an extreme level."
This profit-taking has a promoting effect on the current cryptocurrency market. Previously, Bitcoin has often moved independently, with other Altcoins seeing relatively small gains. After this decline, other Altcoins rebounded quickly, which seems to also verify that some of the funds from those who took profits from Bitcoin have flowed into other Altcoins, which has a positive effect on sector rotation.
In addition, market sentiment has also been affected by macroeconomic factors. Investors' expectations for the upcoming U.S. non-farm payroll data have exacerbated market volatility. Economists generally expect that the number of new jobs will increase in November, and strong employment data may lead the Federal Reserve to re-evaluate its rate cut policy. If the data performs strongly, the Federal Reserve may slow the pace of rate cuts, which would put some pressure on risk assets including Bitcoin.
Future Trend Analysis: Still Many Positive Factors, $120,000 Becomes a New Milestone
Looking ahead, Bitcoin's price trend may be affected by multiple factors:
Impact of Non-Farm Payroll Data: The non-farm payroll data to be released tonight will be the focus of market attention. If the data is strong, it may trigger a further decline in Bitcoin prices; conversely, if the data is weak, market sentiment may improve, driving a rebound in Bitcoin. Investors need to closely monitor these economic indicators, as they have important implications for the Federal Reserve's monetary policy.
Changes in the Macroeconomic Environment: In addition to employment data, changes in the overall macroeconomic environment will also affect Bitcoin's performance. The Federal Reserve's monetary policy, interest rate changes, and fluctuations in the global economic situation may all have a profound impact on the Bitcoin market. The market generally expects the Federal Reserve to cut interest rates by 25 basis points at this month's meeting, and this expectation may stimulate market liquidity and provide support for Bitcoin prices.
Continued Support from Institutional Investors: The interest of institutional investors is still on the rise, with WeFi co-founder Maksym Sakharov pointing out that many institutional investors are steadily accumulating Bitcoin to hedge against inflation and economic uncertainty. This sustained demand will provide support for Bitcoin prices, especially during periods of market volatility.
Investor Sentiment and Market Confidence: Market sentiment and investor confidence will continue to affect Bitcoin's price. Although the current market has experienced violent fluctuations, the rapid rebound has also made many investors optimistic about Bitcoin's long-term prospects. With the participation of more institutional investors, market confidence is expected to recover, driving Bitcoin prices to break through upwards.
In summary, this decline is the release of emotions after the target was reached, and the overall direction has not changed. We look forward to the continued rise of the cryptocurrency market in 2025, and there seems to be no major obstacles ahead.
