In the past week, BTC has continued to rise, breaking through $96,000, $97,000, $98,000, and $99,000 ATH. Market attention on BTC has returned to its peak, with anticipation for BTC to break $100,000. Not only has the BTC Google search index skyrocketed, but Microstrategy also utilized its over-allotment option for its convertible bonds, with its 2029 maturing MSTR closing above $104 on the first trading day.
On the 23rd, after BTC broke the ATH of $99,588, the market struggled to rise and fell to around $95,734, although it rebounded back to around $98,000. However, BTC entered a downtrend on the night of the 25th, reaching a low of $92,326.31, with a maximum decline of 6.5% in 24 hours. Currently, BTC price fluctuates around $93,000 (data source: Binance spot, November 26, 17:00).
Although BTC experienced the largest pullback in nearly half a month, the cryptocurrency market did not react as violently as before, with ETH not falling and most altcoins not entering a steep decline, some even showing slight increases. With Trump about to take office, BTC investors taking profits, and complex leverage effects, BTC's volatility may further increase.
BTC technical indicators have entered a short-term overbought phase, with some long-term holders taking profits.
Since Trump's victory, BTC technical indicators have shown a serious overbought condition. Before this week, BTC was the only investment in Trump's economy that had not seen profit-taking, and as the public's FOMO sentiment intensifies, many long-term holders are choosing to cash out. Crypto Banter analyst Kyledoops pointed out that long-term BTC holders have sold 128,000 BTC, although BTC ETFs absorbed 90% of the selling pressure during the same period.
Market FOMO sentiment is too high, BTC price pullback may benefit future market development
Microstrategy exercised its over-allotment option of $400 million based on the $2.6 billion convertible bonds (0% coupon, 55% premium), raising the final size to $3 billion. This batch of convertible bonds, maturing in 2029, closed above $104 on the first trading day.
At the same time, the market quickly launched Microstrategy's leveraged ETFs (MSTX, MSTU), providing retail investors with more 'suboptimal' ways to leverage trade BTC spot. According to Bloomberg, the high demand for these leveraged ETFs has put pressure on the main brokers responsible for securities lending, with the related asset management scale surging to nearly $5 billion in the past week.
Public opinion continues to raise BTC's profile, with a well-known television commentator suddenly shifting to support cryptocurrency, suggesting that investors hold BTC at high points. Market FOMO further exacerbates the recent market bubble, leading to a significant increase in leverage at current market levels and causing actual volatility to rise sharply.
Macroeconomic Interpretation
Strong U.S. economic indicators increase the possibility of a soft landing for the economy.
Data shows that over $448 billion has flowed into the U.S. stock market this year, breaking the record set in 2021, reaching an unprecedented level. Meanwhile, Nvidia's earnings report exceeded expectations, and U.S. stocks remain strong. Economic indices have rebounded to strong first-quarter levels, and inflation data has yet to break upward. The high-income consumer index has reached a new high, and the consumption power of the U.S. high-income group remains strong. From the data, the possibility of a soft landing for the U.S. economy is increasing.
The Lebanon-Israel conflict may be nearing its end, with safe-haven funds withdrawing.
The Lebanon-Israel conflict is nearing its end, with safe-haven funds withdrawing. In addition to the cryptocurrency market, overnight gold, crude oil, and other commodity markets also experienced sharp declines. As of the night of November 25, London gold, London silver, COMEX gold, and COMEX silver all fell over 3%.
CCTV news reported that on November 25 local time, U.S. State Department spokesperson Matthew Miller stated during a briefing about the Lebanon-Israel ceasefire agreement that the ceasefire agreement 'has not yet been reached,' and the U.S. believes that the gap between the negotiating parties' differing opinions on the ceasefire agreement has 'greatly narrowed,' but some measures still need to be taken to promote its conclusion. The U.S. is pushing for negotiations 'as much as possible.'
On the 25th local time, Lebanon’s MTV television station reported that Lebanon has received a ceasefire notification from Israel, which will be announced tomorrow night. According to the Israel Times, Israel has in principle agreed to a ceasefire agreement with Hezbollah with U.S. support.
Trump's tariff remarks caused a massive shock in the foreign exchange market.
On the 25th, Trump announced that a 25% tariff would be imposed on all products entering the U.S. from Mexico and Canada. Following the announcement, the currencies of Canada and Mexico fell more than 1% against the dollar, increasing volatility in the foreign exchange market with a daily trading volume of up to $7.5 trillion, and emerging market currencies generally weakened. Commodity currencies like the Australian dollar and New Zealand dollar also fell. The Asia-Pacific stock markets were under pressure, with all markets declining.
Market Suggestions
The current market FOMO remains, and investors are advised to remain rational in the absence of a significant alleviation of the overbought condition. It's important to ensure robust risk control while properly managing asset allocation to capture profits while further avoiding risks. Additionally, given that Trump has previously conveyed unfiltered thoughts and policy intentions directly through social media, the market will be filled with a lot of speculation and contradictory trading ideas, making it very important to maintain flexibility in asset allocation.
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