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Written by: 0xWeilan, Source: EMC Labs
The huge cycle wheel is turning, pushing the market, which was still full of fear and hesitation not long ago, into a new stage, and trading suddenly heats up in this mood.
As we predicted: The internal crypto market has been sorted out before, and this month has ushered in an external trigger point – the US presidential election ended on November 6, and the Republican candidate Trump, who is friendly to Crypto, won, and BTC prices continued to hit new highs., approaching $100,000.
The finalization of this year’s major event has caused traders in various financial markets to gradually get out of chaos and uncertainty, return to the established trading rhythm, and US stocks have resumed rising.”Trump’s economic policy” is expected to become the main trading point, and Tesla, micro-strategy, etc. have become the targets with the largest increase.
BTC suddenly started in the decline at the end of October, conquering multiple technical suppression such as “new high consolidation zone” and “upward trend line” in one fell swoop, setting a record high, reaching a high of US$99,860, recording a sharp rise of 37.42% throughout the month..
As the trading market heated up, funds ushered in a huge inflow in November, recording an inflow of US$25.9 billion throughout the month, becoming the largest inflow month in the Crypto market in history.
Against the backdrop of BTC approaching the $100,000 mark, the continued capital inflow has finally triggered a sharp rise and general rise in Altcoin, represented by ETH.
EMC Labs comprehensive multi-dimensional judgment, the second wave of this round of cyclical crypto market “rise period” has started, and after that, funds in the market will gradually flow into Altcoin to form a general rise.
The high inflation that may be triggered by “Trump’s economic policy” has conflicted with the ongoing pace of interest rate cuts by the Federal Reserve has become the biggest uncertainty.However, this uncertainty is only a little disharmony of great certainty and is not enough to change the trend of market operation.
Macro Finance: Trump’s Economic Policy
“Trump’s economic policy” mainly includes tax cuts and relaxation of supervision, protectionist trade policies, energy independence and traditional energy support, fiscal expansion and debt risks, immigration and labor policies, politics and debt management, etc.
These economic policies guided by the spirit of “America First” will pose great challenges to the existing global trade and financial order, causing unpredictable conflicts and chaos.Even in the United States, seemingly irreconcilable contradictions will be formed at levels such as economic growth, illegal immigration and the financial system.
Repatriation of illegal immigrants and raising tariffs may both push up inflation, while federal interest rates are still at a high level, inflation rebounds and interest rate cuts may be hindered.Without interest rate cuts, it will undoubtedly be more difficult for the government to expand fiscally, and the high debt scale will overwhelm the US government.
The Federal Reserve, which is in the process of lowering interest rates and reducing balance sheets, is also facing a dilemma.The US CPI rebounded unexpectedly in November, while employment data and economic conditions remained good, which meant that the need for interest rate cuts was greatly weakened.Although the dot chart and the Fed’s meeting minutes show that a 25 basis point cut in December is still a high probability event, the interest rate cut process in 2025 is likely to slow down.
Powell hopes to uphold professionalism, maintain economic stability, and normalize inflation levels.But Trump has made it clear that through change and conflict to fulfill his campaign promises – lowering corporate taxes and increasing import tariffs and providing more domestic jobs.The two claims are almost irreconcilable, and the contradiction has been made public.
Although there is great uncertainty, traders in various markets are already taking sides and giving decision results – to go long on the US economy, the most optimistic result is “high inflation and high growth.”
In November, the Nasdaq, Dow Jones and the S&P 500 recorded 6.21%, 7.54% and 5.74% gains, respectively, while the RUT2000, which represents SMEs, recorded 11.01% gains and set record highs.
In terms of US Treasury bonds, the long-term and short-term yields closed at the end of the month at 4.177% and 4.160% respectively, both recording slight declines, indicating that the bearish risk of US Treasury bonds has temporarily declined.
The US dollar index continued to rise, closing at 105.74 in November, up 1.02% from the previous month, while the exchange rates of the euro, RMB and Japanese yen depreciated against the US dollar.Global funds are optimistic about the US financial market in the future, and the trend of rushing to buy US dollar-denominated assets is still continuing.
Correspondingly, gold, which undertakes global safe-haven funds, fell 3.41% within the month, recording the largest monthly decline in 14 months.As liquidity gradually emerges from the post-epidemic era, global capital’s risk appetite is increasing.Equity assets, as well as Crypto represented by BTC, are the beneficiaries of this improvement.
Crypto Assets: BTC All-time High, Altseason Launches At Anytime
In November, BTC opened at US$70,198.02 and closed at US$96,465.42, an increase of 37.42%, with an amplitude of 47.12%, and the trading volume was effectively amplified.
After returning to the “200-day moving average” in November and crossing the “downward trend line”, BTC continued to achieve a landmark breakthrough in technical indicators this month, breaking through the upper edge of the “new high consolidation zone” that had been stalemate in August.And after 4 months, we stepped onto the “upward trend line” again.
BTC daily price trend
On the monthly line, BTC achieved continuous rises in March and its volume continued to increase moderately, showing a positive upward trend.
BTC monthly price trend
In previous research reports, we have repeatedly emphasized that more than 30% of BTC in the new highs from March to October this year have been transferred. This upward repricing has occurred repeatedly in the past cycle and has become an internal internal price increase in the future.Structural support.
The final breakthrough in price requires the initiation of external conditions.
The biggest event in the world in November was Trump’s re-election of the US president. His previous enthusiasm for Crypto and his “commitment” during the campaign became the “new high consolidation zone” that BTC broke through for August.Emotional catalyst.
Is BTC’s “Trump Market” sustainable?EMC Labs believes that whether it is the 21st Century Financial Innovation and Technology Act proposed last year, or this year’s “U.S. Bitcoin Strategic Reserves”, or even the “Bitcoin Rights Act” recently passed by the Pennsylvania House of Representatives, it shows that the United States is ruling.Crypto’s adoption is gradually shifting from “permit” to “promotion”. The goal is to finally obtain crypto assets and blockchain industries represented by BTC (public chain, infrastructure and decentralization) through laws and regulations and national strategies.control of the application project ensures that the United States gains a dominant advantage in this emerging track.
Therefore, the support from US policy and the adoption of Crypto by traditional institutions including financial institutions and listed companies over the next few years can be expected to continue to increase.At any moment in previous history, the blockchain industry and crypto assets have never been accepted and adopted so vigorously.
Rising liquidity: Two major channels resonate and set historical records
The continuous inflow of funds is the material support for the bull market.
In November, the BTC Spot ETF and stablecoin mass channel had a combined inflow of US$25.9 billion, setting the largest single-month inflow on record.Among them, ETF channels are 5.4 billion and stablecoin channels are 19.5 billion.In November, the scale of ETF capital inflows exceeded February, becoming the largest inflow month.
Monthly statistics on capital flow in crypto market
Since October, with the US election approaching its end, the first to launch the ETF channel funds.Since September, the inflow scale of funds in this channel has begun to gradually increase, with inflows of 1.2 billion, 5.4 billion and 6.4 billion respectively from September to November.We previously emphasized that the funds in the ETF channel have independent will and will gradually control the price trend of BTC.This is fully reflected in the recent market.
Compared with the “leader” who bravely shoulder heavy responsibilities, the funds in the stablecoin channel should be a little aware of it.After November, BTC prices continued to break through and began to show a surge in volume.However, the monthly inflow of funds from stablecoin channel reached US$19.5 billion, far exceeding ETF channel funds.
Daily statistics on capital flow in crypto market
On November 22, when BTC hit the $100,000 mark, funds on the market began to start ETH, with an increase of 9.31% on the day.The cumulative ETH increase in November reached 47.05%, surpassing BTC, and the market seems to be opening up Altseason.
EMC Labs believes that after BTC breaks through the $100,000 mark in the future, Altseason will gradually open.After Altseason opened, the market gradually showed: 1. ETH broke through a historical high; 2. The market generally rose; 3. The main market trend was gradually identified.
Long-term and short game: liquidity gives birth to the second selling
The cycle is a game where long and short hands collect and distribute chips in the space-time range.
Long-term hands collect chips during the decline period, the bottoming period and the restoration period, while continuing to sell during the rising period and the conversion period until liquidity is difficult to absorb the selling pressure, and the market ushers in a reversal.
Since January 2024, Changshou has launched the first large-scale selling, and then returned to the state of chip accumulation after the market entered consolidation in March.As liquidity recovered in November, prices hit new highs. Changshou has started the second selling point, which is also the last large-scale selling point in this cycle.
BTC’s long-term selling history over the past 15 years
As of the end of September, the long-term holdings had a total of 14.22 million pieces, and the selling position reached 13.69 million pieces by the end of November, and the “selling scale” in two months reached 530,000 pieces.
During the rising period, the driving force behind long-term selling is the price increase brought about by liquidity, and the price increase is also a self-certification process of the market, which will trigger more capital inflows.
The secondary sell-off of Changshou has just been going on for two months. With the continued increase in liquidity, it is expected to continue in the first half of 2025.
Conclusion
In November, the cycle once again showed its strong market regulation ability.
EMC Labs believes that the fundamental reason for the rise in prices of BTC and the entire crypto market is that based on the complete internal structure, the continuous interest rate cuts in major economies around the world and the significant increase in investor risk appetite are the fundamental reasons.In addition, the significant increase in adoption and the expectations of US national policy also provide great emotional and material motivation.
We believe that these external factors will continue to provide power to the crypto market in the coming year.Therefore, the crypto bull market will continue to rise after restarting, with still twists and turns in the middle, but the second half of the rise period is destined to provide more lucrative returns for long-term investors.
