Bitcoin broke through the $106,000 mark this morning, setting a new historical high, continuing the upward trend since the US President-elect Donald Trump's endorsement of cryptocurrencies. Since the US election, Bitcoin has cumulatively surged over 55%, and has been rising for 7 consecutive weeks, setting the longest weekly gain record since 2021.
VX: TTZS6308
With the market's high expectations for Trump's proposed "national Bitcoin reserve", and the optimistic expectations of a rate cut by the Federal Reserve (Fed) this week, Bitcoin soared to $106,352 earlier today, breaking the previous high record set on December 5th, and has now retreated to $105,038, up 3% in the past 24 hours.
The rise of Ether is also remarkable, reaching a high of $4,012.57 today, and is currently trading at $3,950, up 2.5% in the past 24 hours.
Trump's friendly attitude towards cryptocurrencies has completely reversed the high-pressure regulatory environment of the Biden administration, becoming an important driver of Bitcoin's rise. He not only proposed the establishment of a "national Bitcoin strategic reserve", but also called for the US to become the global leader in the cryptocurrency industry, reigniting market expectations.
This policy orientation is undoubtedly a catalyst for Bitcoin's breakthrough to record highs, and has also driven the cryptocurrency market into a new round of frenzy.
"Investors are betting that the Trump administration will bring a more friendly regulatory environment," and this confidence is also reflected in the strong demand for cryptocurrency ETFs, which have attracted over $12.2 billion in inflows since the US election in November.
The market sentiment indicator "Greed and Fear Index" has soared to 83, entering the "Extreme Greed" zone, indicating that investors are extremely confident about the future.
However, the Bitcoin rally may face correction risks, especially when the upward momentum slows down, which may mean "increased short-term pullback pressure".
The Federal Reserve (Fed) will hold a policy meeting on December 18th, and the market generally expects a 25 basis point (0.25 percentage point) rate cut, which, if realized, will further drive capital flows into the high-yield cryptocurrency market.
Today's historical high is exciting on the surface, but the actual buying is barely enough, as the premium on Coinbase has been flattened, meaning that it is not real money buying, but rather leveraged short-covering and long accumulation that have completed this new high.
At the same time, Altcoins have not seen a large-scale wealth effect, indicating that the demand in the market is rapidly drying up and the liquidity is tightening.
Looking at the long positions in the futures market, there is a large amount of long positions accumulated above $100,000, which is the perfect fuel for the bears, so it will be extremely difficult to continue the upward momentum in the short term, unless there is a frenzy of buying in the US stock market tomorrow, which is not common before Christmas.
Now at the $105,000 level, if you ask me whether it will "surge to $110,000" or "pull back to around $100,000", I may be more inclined to the latter, but even after the pullback, it is still possible to break through the previous high again. It is now a perfect torture of the futures market funds, and whichever side the funds are on, they will be harvested.
In any case, remember to respect the market, as moments of forgetfulness often precede huge losses. We don't try to predict where this trend will top out, maybe $110,000 or even $120,000, but the room for upside is limited. As for those who are trading Altcoins, setting a stop loss is the top priority, as experiencing the top is something you don't want to feel in this lifetime.
