With Bitcoin ETFs stabilizing after record inflows and FOMO impacting investors, the cryptocurrency market is now rising again.
November is the most bullish month of the year, with Coinglass's monthly Bitcoin return report showing an increase of +36.29%, more than three times that of Uptober. If the cryptocurrency market hadn't collapsed yesterday, the same data would have been higher, but the situation has changed today. Bulls have returned to high ground, pushing Bitcoin's price from an earlier $91,000 to $95,700. The concern over that simple collapse was due to investors worrying about the potential Thanksgiving massacre, which caused Bitcoin's price to drop 17% within hours in 2020. However, the market has different plans, as all cryptocurrencies were painted green on the heatmap.
Why has the cryptocurrency market risen after an earlier decline?
After a slight pullback, the market has returned to its previous state. As a result, the global market cap reached $3.31 trillion after a 3.11% increase. Even the Fear and Greed Index has turned to 'Extreme Greed,' with all major cryptocurrencies trending upwards, including Ethereum (up 5% to $36,000), Solana (up 2.6% to $239), XRP (up 6% to $1.48), and more.
Although this is part of the industry, consolidation occurs after significant increases, followed by a recovery, but there are four additional reasons behind this rise in the cryptocurrency market.
1. FOMO sentiment returns to the cryptocurrency market
As Bitcoin reached $91,000, people are waiting for a price drop around Thanksgiving and Black Friday, increasing buying demand. This is because historical trends indicate a significant rise after these holidays. During this period, everyone is focused on the tokens, some excited, while others feel fear. Regardless, Google Trends has reached its ATH for the first time since May 2022. It clearly indicates that FOMO sentiment is returning to the market.
Not only Bitcoin, but other popular altcoins are also in high demand. Even failed tokens like XRP, which shocked investors with its performance before the collapse, are included. Ethereum futures open interest also reached an all-time high, indicating bullish sentiment in the market. The same goes for Bitcoin, with overall open interest surpassing $12 billion, driving the rebound in the cryptocurrency market.
2. Political shifts favorable to the industry
The U.S. presidential election is one of the biggest macroeconomic events affecting the cryptocurrency market. With Donald Trump turning into a cryptocurrency supporter, the entire market witnessed this bullish momentum, pushing Bitcoin's price close to $100,000. Similar political influences have also aided the market, with discussions on establishing strategic Bitcoin reserves and replacing SEC Chairman Gary Gensler with a more crypto-friendly leader contributing to the bullish sentiment.
Many other countries are considering adopting Bitcoin as a national financial investment. Just recently, Vancouver Mayor Ken Sim submitted a Bitcoin proposal aimed at achieving financial resource diversification and becoming a Bitcoin-friendly city.
3. Morocco and China lifting cryptocurrency bans
Morocco and China are among the few countries that have banned cryptocurrencies in recent years, affecting market performance. However, things are gradually improving, with many Chinese companies starting to adopt cryptocurrencies. One of the biggest examples is the SOS plan to invest $50 million in Bitcoin to significantly enhance its strength. Additionally, the Chinese government has also issued some positive signals, which may lead to a complete lifting of the ban.
On other sites, the news that Morocco lifted its ban on the cryptocurrency industry yesterday fueled the rise of the cryptocurrency market. The government had prohibited cryptocurrency trading since 2017 but has now announced its legalization.
4. Inflows from BTC and ETH ETFs and new ETF filings
Bitcoin ETFs have become a major hotspot for investors. In just a few months, this ETF has established high demand, with trading volumes reaching millions. The collapse of the cryptocurrency market itself was a result of increased outflows from ETF funds, but the situation has changed. Data shows that the BTC ETF has received $103 million in inflows, purchasing 1,120 BTC.
Even the inflow of the ETH ETF has significantly increased, reaching $90.1 million, purchasing approximately 27,080 ETH. Overall, this indicates stable interest from institutional investors.
Additionally, the frenzy around ETFs continues, with Bitwise having applied for 10 crypto index ETFs, including Bitcoin, XRP, Solana, Cardano, Uniswap, Polkadot, Chainlink, Ethereum, Avalanche, and Bitcoin Cash, which is quite impressive.
Will Bitcoin's price break through $100,000 next?
With the recovery of the cryptocurrency market and bullish sentiment among investors, the biggest question is whether Bitcoin's price will reach $100,000 again. The token indeed has potential, as it almost touched the $100,000 milestone, setting a historical high of $99,600.
However, with recent consolidation, the situation has changed, as the 12-hour chart shows bearish divergence. This may lead to further consolidation or a slight pullback, after which the tokens may surge.
Considering this, some analysts believe that Bitcoin's price may experience a 30% pullback before reaching the $100,000 mark, which could take several days or even weeks.
