Original | Odaily Planet Daily
Author | Azuma
After the election victory of "Cryptocurrency Patriarch" Trump, the arrival of the bull market has become a foregone conclusion, but the rise of BTC has still exceeded the expectations of many people.
Shortly after breaking through the $80,000 mark on the evening of November 10, in just 1 day, BTC broke through $89,000 in the early morning of November 12 —— It once reached a high of $89,575 USDT, showing a strong momentum to continue to attack the $90,000 mark.
OKX real-time market data shows that as of the time of writing, BTC is currently reported at $89,032 USDT, with a 24-hour increase of 10.02%, leaving only about 12.3% of the increase to reach the "$100,000 mark".
In addition to BTC, ETH has also stood above the $3,300 mark, currently reported at $3,327.4 USDT, with a 24-hour increase of 3.7%; SOL has also stood above the $220 mark, currently reported at $221.27 USDT, with a 24-hour increase of 4.96% —— From the race of these two major ecological leaders, SOL seems to be the first to attack a new high before ETH.
Other mainstream Alt-coins have also generally seen an increase, but the magnitude of the increase varies. DOGE, with the "Musk concept coin" effect, surged 22%, currently reported at $0.36 USDT; After OpenAI founder Sam Altman openly shilled "full of confidence in the bright future of cryptocurrencies", the Worldcoin (WLD) he created also surged 28%, currently reported at $2.78 USDT...
In the US stock market, various Crypto concept stocks have also seen a fierce rise. MicroStrategy (MSTR) once broke through the $360 mark, closing at $340, up 25.73%; Coinbase (COIN) closed at $324.24, up 19.76%.
Affected by the overall upward trend, the total market capitalization of cryptocurrencies has also grown rapidly. CoinGecko data shows that the total cryptocurrency market capitalization has now exceeded $3.1 trillion, up 6% in 24 hours. The trading enthusiasm of cryptocurrency users has also clearly increased, with the Alternative Fear and Greed Index reporting 80 today, a new high since March this year, reaching the "Extreme Greed" level.
In terms of derivatives trading, Coinglass data shows that in the past 24 hours, the entire network has seen $658 million in liquidations, with short positions still accounting for the majority, but the scale of long position liquidations has also reached $280 million. In terms of cryptocurrencies, BTC had $251 million in liquidations, and ETH had $87.59 million in liquidations.
Long-term Narrative: The Return of the Bull Market, Aiming for $100,000
Regarding the story of the "return of the bull market", we have already conducted a detailed analysis in the article 《Bitcoin Hits a New All-Time High, Is $75,000 the Starting Point of the Big Bull Market?》.
In short, with Trump's victory, the industry predicts that the regulatory attitude towards cryptocurrencies will undergo a 180-degree change, which will improve the development environment of the industry and lay the foundation for a new round of industry explosion.
The market's reaction to Trump's victory was quite rapid. SoSoValue data shows that in the election week (November 04 - November 10, Eastern Time), the net inflow of funds into the cryptocurrency market reached $6.283 billion —— Among them, the net inflow of US Bitcoin and Ethereum spot ETFs reached $1.792 billion; the net inflow of fiat-backed stablecoins (USDC, USDT, FDUSD, TUSD, PYUSD, USDP, GUSD) reached $4.492 billion —— a new weekly net inflow high since January 2022.
Many institutions and industry leaders have also given positive forecasts for the future market trend, and "$100,000" seems to have become the next key level for BTC, and we have also carefully sorted out the views of various parties in the article 《BTC Has Officially Entered the "$80,000 Era", Is $100,000 Still Far Away?》.
Short-term Possibility: Beware of Corrections After the Surge
In this article, we want to focus more on the potential risk of corrections, which may be a topic that most investors are not too willing to face.
In general, we believe that the factors facing the current market correction mainly have three aspects.
Correction Factor One: Policy Fulfillment Expectations
The first factor is the fulfillment of Trump's policy expectations, that is, whether the industry can welcome the expected changes in the regulatory environment after Trump's victory.
On this issue, various institutions also hold different views in their forecasts —— Forbes emphasizes that "although the market generally holds an optimistic attitude, the degree of regulatory changes is still uncertain, and it will still depend on the policies of the White House and Congress"; the investment bank TD Cowen believes that the regulatory environment will change as expected, but also emphasizes that "the focus of the Trump team is to extend tax cuts and solve tariff and trade issues, and cryptocurrencies will not be their top priority", so the strength and timing of policy implementation is still to be determined.
There is also a relatively subtle situation here, that is, Trump's inauguration time is January 20 next year, and there is still a window period of about 2 months of "relatively optimistic prospects but unable to be actually implemented" before that. Some more cautious views believe that this means that the good news is not yet certain, but there are also optimists such as Matrixport who believe that this will give the "market a few weeks to maintain this upward trend" —— relatively speaking, we are more inclined to the latter judgment, after all, "confidence is the first productive force", and a few months is enough time to complete a bull market cycle.
In summary, the fulfillment of policies will be a decisive factor in whether this bull market can be sustained, but considering the existence of the window period, this factor may not have a direct impact on the short-term market trend for the time being. Relatively speaking, the latter two factors may more directly affect the short-term market trend.
Correction Factor Two: Changes in the "Easing" Pace
The second factor is the impact of Trump's victory on the Fed's interest rate cut pace, that is, whether the victory will reduce the market's previous interest rate cut expectations.
Previously, we have analyzed this factor in the article《The Most Important Wind Vane After the Election: Will Trump's Economic Policy End the Fed's Easing?》.
Combining the latest market sentiment, many institutions have already predicted that Trump's victory will directly lead to a reduction in the Fed's interest rate cut expectations before 2025 —— the current possibility of the Fed cutting interest rates by 25 basis points in December is 68%, while the possibility before Trump's victory was about 83%.
This week, including Powell (4:00 am Beijing time on Friday), multiple Fed officials will give speeches intensively; in addition, the release of the October CPI data (9:30 pm Beijing time on Wednesday) will also have a major impact on the market's interest rate cut expectations. This may be the most critical factor in determining the subsequent market trend this week.
The third factor driving callbacks: Gradually rising leverage
The third factor is the gradually rising leverage in the current market, which has objectively created conditions for the market's sharp fluctuations.
Coinglass data shows that the total open interest of BTC futures contracts on the network has reached 594,500 BTC (about $52.3 billion), continuously refreshing a new historical high; the notional value of the open interest of BTC options on the network has reached $34.4 billion, also hitting a new high.
Since the position size of derivatives is affected by the price of the underlying asset, considering that BTC has hit a new high, the actual leverage situation may not have reached a new high level, but the current upward trend is still worth vigilance.
Looking back on past market trends, leverage is the booster of a bull market, and also the fuse of extreme market conditions. While predicting market trends cannot be "grasping at straws", risk control is an eternal topic.
