The market, project, cryptocurrency and other information, opinions and judgments mentioned in this report are for reference only and do not constitute any investment advice.
The cycle of the giant wheel is turning, pushing the market that was once full of fear and doubt into a new stage, and trading is suddenly heating up in this emotion.
As we predicted in the October report "Monthly increase of 10.89%, BTC may hit a new high after the chaos of the US election", the internal adjustment of the crypto market has been completed, and an external trigger point has arrived this month - the US presidential election on November 6. The Republican candidate Trump, who is friendly to Crypto, won, and the BTC price kept hitting new highs, approaching $100,000.
The conclusion of this annual major event has led traders in various financial markets to gradually emerge from the chaos and uncertainty and return to the established trading rhythm, and the US stock market has resumed its upward trend. The "Trump economic policy" expectation has become the main trading point, with Tesla, MicroStrategy and others becoming the biggest gainers.
BTC suddenly started up in the downturn at the end of October, breaking through multiple technical resistances such as the "new high consolidation zone" and the "upward trend line" at one stroke, and kept hitting new highs, reaching a maximum of $99,860, with a substantial increase of 37.42% for the whole month.
Accompanied by the heating up of the trading market, November saw a huge influx of funds, with a total inflow of $25.9 billion, the largest monthly inflow in the history of the Crypto market.
Against the backdrop of BTC approaching the $100,000 mark, the continuous inflow of funds has finally triggered a sharp and widespread rally in Altcoins represented by ETH.
Based on a comprehensive multi-dimensional judgment, EMC Labs believes that the second wave of the "upward phase" of the current crypto market cycle has started, and funds in the market will gradually flow into Altcoins, forming a widespread rally.
The potential conflict between the "Trump economic policy" that may trigger high inflation and the Fed's ongoing rate cuts is the biggest uncertainty. However, this uncertainty is just a minor discord in the overall certainty, and is not enough to change the trend of market operation.
Macro Finance: Trump Economic Policy
The "Trump economic policy" mainly includes tax cuts and deregulation, protectionist trade policy, energy independence and support for traditional energy, fiscal expansion and debt risk, immigration and labor force policy, political and debt management, etc.
These economic policies guided by the "America First" spirit will pose a great challenge to the existing global trade and financial order, triggering unpredictable conflicts and chaos. Even within the US, there will be seemingly irreconcilable contradictions in terms of economic growth, illegal immigration and the financial system.
Deporting illegal immigrants and raising tariffs could push up inflation, while the federal interest rate is still at a relatively high level, making it difficult for the Fed to cut rates. Without rate cuts, the government's fiscal expansion will undoubtedly be more difficult, and the high debt level will be a heavy burden for the US government.
The Fed, which is in the process of cutting rates and balance sheet reduction, is also in a dilemma. The unexpected rebound in the US CPI in November means that the need for rate cuts has greatly diminished. Although the dot plot and the Fed's meeting minutes indicate that a 25 basis point rate cut in December is still a high probability event, the rate cut process in 2025 is likely to slow down.
Powell hopes to uphold professional integrity, maintain economic stability, and normalize the inflation level. But Trump has clearly stated that he will fulfill his campaign promises through reform and conflict - lowering corporate taxes, raising import tariffs, and providing more domestic employment. Their propositions are almost irreconcilable, and the contradiction has already been publicly exposed.
Although there is great uncertainty, traders in various markets have already taken sides and made decisions - long the US economy, with the most optimistic result being "high inflation, high growth".
In November, the Nasdaq, Dow Jones and S&P 500 recorded gains of 6.21%, 7.54% and 5.74% respectively, while the RUT 2000, which represents small and medium-sized enterprises, recorded a gain of 11.01% and hit a new high.
In the US bond market, the long-end and short-end yields at the end of the month were 4.177% and 4.160% respectively, both recording a slight decline, indicating that the bearish risk on US bonds has temporarily subsided.
The US dollar index continued to rise, closing at 105.74 in November, up 1.02% from the previous month, while the euro, renminbi and yen all depreciated against the US dollar. The trend of global funds favoring the US financial market and snapping up US dollar-denominated assets is continuing.
Correspondingly, gold, which has been the recipient of global safe-haven funds, fell 3.41% during the month, recording the largest monthly decline in 14 months. As the post-pandemic era is gradually emerging, global liquidity is becoming increasingly abundant, and the risk appetite of global funds is rising. Equity assets, as well as Crypto represented by BTC, are the beneficiaries of this increase.
Crypto Assets: BTC Hits New High, Altseason Ready to Launch
In November, BTC opened at $70,198.02 and closed at $96,465.42, up 37.42% with a volatility of 47.12%, and trading volume expanded effectively.
After returning to the "200-day moving average" and breaking through the "downward trend line" in November, BTC continued to achieve landmark breakthroughs in technical indicators this month, breaking through the resistance at the top of the "new high consolidation zone" that had been stuck for 8 months, and stepping back onto the "upward trend line" for the first time in 4 months.
BTC Daily Price Trend
On the monthly chart, BTC has achieved 3 consecutive months of gains with steady volume expansion, showing a healthy upward trend.
BTC Monthly Price Trend
In previous reports, we have repeatedly emphasized that over 30% of BTC addresses have experienced address transfers in the new high consolidation zone from March to October this year, and this upward repricing has occurred repeatedly in past cycles, becoming an internal structural support for future price increases.
The final breakthrough in price, however, requires the catalysis of external conditions.
The biggest global event in November was Trump's re-election as US president, and his previous enthusiasm for Crypto and "promises" during the campaign process have become the emotional catalyst for BTC to break through the "new high consolidation zone" that had been stuck for eight months.
Is BTC's "Trump rally" sustainable? EMC Labs believes that whether it is the "21st Century Financial Innovation and Technology Act" proposed last year, the "American Bitcoin Strategic Reserve Bill" this year, or the recently passed "Bitcoin Rights Act" in the Pennsylvania House of Representatives, they all show that the US's adoption of Crypto is gradually shifting from "allowing" to "promoting", with the goal of gaining control over BTC-represented crypto assets and the blockchain industry (public chains, infrastructure and decentralized application projects) through legal and regulatory support and national strategies, ensuring the US's dominant position in this emerging track.
Therefore, the support from US policies and the continued adoption of Crypto by traditional institutions including financial institutions and listed companies can be expected in the coming years. At no point in history has the blockchain industry and crypto assets received such a strong degree of acceptance and adoption.
Surging Liquidity: Two Major Channels Resonate to Create Historical Records
Continuous inflow of funds is the material support for the bull market.
In November, the combined inflow of BTC Spot ETF and stablecoins reached $25.9 billion, the largest single-month inflow on record. Of this, the ETF channel accounted for $5.4 billion and the stablecoin channel for $19.5 billion. In November, the ETF fund inflow exceeded that of February, becoming the largest inflow month.
Monthly Statistics of Crypto Market Capital Flows
Since October, the ETF channel capital has been the first to be activated as the US election is coming to an end. The ETF channel capital has been gradually increasing in scale since September, with inflows of 1.2 billion, 5.4 billion and 6.4 billion in September, October and November respectively. We have previously emphasized that the capital in the ETF channel has an independent will and will gradually take control of the price trend of BTC. This has been fully reflected in the recent market situation.
Compared to the "big brother" who bravely takes on the responsibility, the stablecoin channel capital is relatively late to the party. After entering November, with the continuous breakthrough of BTC price, it began to show a surge in inflow. However, the total monthly inflow of the stablecoin channel capital reached 19.5 billion US dollars, far exceeding the ETF channel capital.
Daily Statistics of Crypto Market Capital Flows
On the day when BTC challenged the $100,000 mark on November 22, the on-chain capital began to activate ETH, with a daily increase of 9.31%. In November, the cumulative increase of ETH reached 47.05%, exceeding BTC, and the market seems to be opening up the Altseason.
EMC Labs believes that after BTC breaks through the $100,000 mark, the Altseason will gradually open up. After the Altseason opens up, the market will gradually show: 1. ETH breaks through the historical high; 2. The market is generally bullish; 3. The main market trend is gradually identified.
Long-Short Game: Liquidity Triggers the Second Wave of Sell-offs
The cycle is a game of accumulation and distribution of chips between the long and short hands in the time and space range.
The long hands accumulate chips during the downward period, the bottom period and the repair period, while conducting continuous sell-offs during the upward period and the conversion period, until the liquidity can no longer absorb the selling pressure, and the market ushers in a reversal.
In this cycle since January 2024, the long hands have launched the first large-scale sell-off, and after the market entered a consolidation in March, they have returned to the state of chip accumulation. In November, with the recovery of liquidity and the creation of new highs in prices, the long hands have already launched the second wave of sell-offs, which is also the last large-scale sell-off in this cycle.
BTC Long-Term Holder Sell-Off History in the Past 15 Years
As of the end of September, the long-term holder position was 14.22 million, and by the end of November, the sell-off position reached 13.69 million, with a "sell-off scale" of 530,000 in two months.
In the upward period, the motivation for the long-term holder to sell is the price increase brought by liquidity, and the price increase is also the self-proving process of the market, which will lead to more capital inflows.
The second sell-off by the long-term holders has just been going on for 2 months, and with the continued increase in liquidity, it is expected to continue in the first half of 2025.
Conclusion
In November, the cycle once again demonstrated its powerful market adjustment ability.
EMC Labs believes that the fundamental reason for the rise in the price of BTC and the entire crypto market is that on the basis of the completion of the internal structure adjustment, the continuous interest rate cuts by the world's major economies and the significant increase in investor risk appetite are the fundamental reasons. In addition, the significant increase in adoption and the expectation of US national policy have also provided great emotional and material momentum.
We believe that these external factors will continue to provide momentum support for the crypto market in the coming year. Therefore, after the crypto bull market restarts, it will continue to rise, with some twists and turns in the middle, but the latter part of the upward period is destined to provide more generous returns for long-term investors.
EMC Labs was founded in April 2023 by crypto asset investors and data scientists. It focuses on blockchain industry research and Crypto secondary market investment, with industry foresight, insight and data mining as its core competitiveness, committed to participating in the thriving blockchain industry through research and investment, and promoting blockchain and crypto assets to bring welfare to humanity.
For more information, please visit: https://www.emc.fund
