The digital currency market has exploded recently. On the evening of November 13th, Beijing time, Bitcoin broke through $92,000 for the first time in history, with a daily increase of more than 5%.
Just a few days ago, on November 10, the price of Bitcoin broke through $80,000 for the first time in history and has remained high since then. Google Finance shows that the price of Bitcoin has risen by 47% in the past month.
BTC market value compared to other mainstream assets: $110,000 to $220,000
According to companiesmarketcap data, the market value of Bitcoin has risen to 1.758 trillion US dollars, surpassing silver (1.732 trillion US dollars) and becoming the eighth largest asset in the world by market value.
Since the Bitcoin spot ETF was approved in January this year, Bitcoin is no longer regarded as a niche asset, but has become a mainstream asset. With the help of Trump's election, Bitcoin has become more visible to the public, and its growth potential can already be compared with other mainstream assets.
As we all know, Bitcoin is also known as digital gold. The current market value of Bitcoin is about 9% of gold. The following simulates several scenarios to estimate the possible future price of Bitcoin:
If Bitcoin's market value reaches 25% of gold's, which is $4.5 trillion, the price will reach $227,162.
If Bitcoin's market cap is the same as Nvidia's, the price would be $183,645
If Bitcoin's market value surpasses Google and ranks fifth, the price will reach $111,730
According to Infinite Market Cap data, Bitcoin's market value surpassed Saudi Aramco and ranked seventh in the global asset ranking. Data showed that Bitcoin's market value reached 1.8 trillion US dollars, a 24-hour increase of 4.36%, while Saudi Aramco's market value was 17,970 US dollars, a 24-hour decrease of 0.53%.
As of press time, according to Coinglass market data, a total of 210,000 people had their positions liquidated in the past 24 hours, with a total liquidation amount of US$661 million.
Since Trump was announced as the winner on November 6, Bitcoin has set new all-time highs almost every day.
In the past 24 hours, Bitcoin's trading volume exceeded $145 billion, setting a new all-time high, nearly 50% higher than the flash crash in early August this year and the peak in March.
This surge in trading volume indicates that retail investors are returning to the crypto market. According to historical data, during the bull market phase, retail trading activity cycles usually last for weeks or even months, so the increase in trading volume can be regarded as a bullish signal.
Google searches for Bitcoin have also surged, reaching 78% of their highest level in the past five years. In addition, since the U.S. presidential election, Bitcoin ETF inflows have exceeded $1 billion for two consecutive days.
As Bitcoin surges, some companies are making a lot of money. According to BitcoinTreasuries data, Tesla, which has recently "won a lot", has made a lot of money from its Bitcoin investment. As the fourth largest Bitcoin holder among US listed companies, Tesla currently holds 9,720 Bitcoins, with a total value of approximately US$890 million as of press time.
Trump wins the election: He promised to express a number of crypto-friendly policies before the election, including making the United States the global capital of cryptocurrency and firing the current SEC chairman. Although it is uncertain whether he can fulfill his promises after taking office, it is foreseeable that the crypto market has often faced regulatory pressure in the past. This situation will be alleviated after Trump takes office, which is undoubtedly the main factor driving the market upward.
The interest rate cut cycle begins: The interest rate cut means that the United States releases more liquidity to the risk market, which will theoretically lead to a rise in the stock market, other countries' fiat currencies and other asset classes, and Bitcoin, which has the highest risk and relatively small market value, can also benefit from this. In November, the interest rate was cut by one basis point. In terms of traditional finance, the market reacted positively, the S&P closed at a new high, and the bond market rose. The transmission of liquidity often takes time, and 2024 Q4 is giving the crypto market an opportunity to take on spillover liquidity.
On November 12, local time, Trump announced that Elon Musk and Vivek Ramaswamy will jointly lead the proposed "Ministry of Government Efficiency" after he takes office as president. After the appointment was announced, Dogecoin (DOGE), which was supported by Musk, continued to rise.
Many investment banks and investors, including Standard Chartered, expect Bitcoin to continue to rise and hit $100,000 by the end of the year. The surge in market sentiment and the influx of a large amount of funds have jointly contributed to the rise of Bitcoin, becoming an important support for its continuous breakthrough of historical highs. The current global economic uncertainty is increasing. How will the US economic policy change, how will Trump implement the encryption policy after he officially takes office, and how will the encryption market promote compliance, all affect the subsequent market of Bitcoin and the entire encryption market.
Bitcoin escape top indicator: top at least $200,000
This indicator uses two types of data to make judgments:
Two-year moving average (730 days, green line)
Five times the two-year moving average (red line)
How to use:
When the Bitcoin price is below the two-year moving average (green line), it is a good time to buy Bitcoin.
When the price exceeds five times the two-year moving average (red line), it is a signal to sell Bitcoin
How to interpret this indicator?
It means whether the short-term price breaks through/falls below the average price of long-term holders. The low point is based on the average price over the past two years. If it is below the green line, it means that it has fallen below the low point in the past two years, indicating excessive panic. This is an excellent long-term buying point.
The red line is five times the average price of the past two years. Once it is broken, it means that the market is too FOMO, which is often a signal of overheating and suitable for selling.
Reviewing the past price performance of Bitcoin, it roughly conforms to this rule. According to the information in the figure below, the price of Bitcoin on November 6 was about 75,000 US dollars, and the red line price was 207,977 US dollars. In recent years, the price of Bitcoin has continued to hit new highs, and the red line price will also rise. This indicator shows that the peak price of this round is at least 200,000 US dollars.
Pi Cycle top indicator: top at least $110,000
The indicator uses two sets of data to determine whether Bitcoin is overheated:
111-day moving average (111DMA, red line)
Two times the 350-day moving average (350DMA x 2, green line)
How to use:
When the 111-day moving average moves upward and crosses above twice the 350-day moving average, it usually represents a top in Bitcoin price and is a sell signal.
How to interpret this indicator?
The meaning of the Pi Cycle top indicator is to observe whether the short-term price breaks through the average price of long-term holders, and to judge the degree of overheating of the market. When the 111DMA (red line) breaks through the 350DMA x 2 (green line), it usually means that the market is overly optimistic and FOMO (fear of missing out) appears, which is often an overheating signal and suitable for considering selling.
According to the latest chart information, on November 6, 2024, the price of Bitcoin was about $75,621, while the price of 350DMA x 2 was about $117,390. This means that when the price of Bitcoin approaches or exceeds this price, it may be a top signal of this round of market.
In December 2013, the People's Bank of China and five other ministries issued a notice on preventing Bitcoin risks, stating that Bitcoin is not a currency and cannot and should not be circulated and used as a currency in the market; at the same time, the document clearly requires that financial institutions and payment institutions should not conduct Bitcoin-related business.
