Written by: 0xWeilan
The cycle's giant wheel turns, pushing a market that was recently filled with fear and hesitation into a new phase, with trading heat suddenly escalating.
As we predicted in our October report (monthly increase of 10.89%, BTC may reach a new high after the chaos of the U.S. elections): the previous internal consolidation of the crypto market has completed, and this month welcomed an external detonating point—on November 6, the U.S. presidential election concluded with the Republican candidate Trump, who holds a friendly attitude towards Crypto, winning, and BTC price continued to reach new highs, approaching $100,000.
The conclusion of this year's major event has allowed traders in various financial markets to gradually emerge from chaos and uncertainty, returning to a predetermined trading rhythm, with U.S. stocks resuming their upward trajectory. Expectations of "Trump's economic policy" have become the main trading point, with Tesla, MicroStrategy, and others becoming the top gainers.
BTC suddenly started in the downturn at the end of October, breaking through multiple technical pressures such as the "new high consolidation zone" and the "uptrend line," continuously reaching historical highs, peaking at $99,860, with a significant increase of 37.42% for the entire month.
Accompanied by a surge in trading conditions, November saw a massive inflow of capital, recording $25.9 billion inflow for the entire month, making it the largest inflow month in the history of the Crypto market.
Against the backdrop of BTC approaching the $100,000 mark, the continuous inflow of funds has finally triggered a sharp rise and general increase in Altcoins represented by ETH.
EMC Labs comprehensively assesses that the second wave of the "uptrend" in the current cycle of the crypto market has already started, and capital will gradually flow into Altcoins in the later market, forming a general rise.
The potential high inflation triggered by "Trump's economic policy" and the conflict with the Federal Reserve's ongoing interest rate cut rhythm has become the biggest uncertainty. However, this uncertainty is merely a slight discord in the grand certainty, insufficient to change the market's operational trend.
Macroeconomic Finance: Trump's Economic Policy
"Trump's economic policy" mainly includes tax cuts and deregulation, protectionist trade policies, energy independence and support for traditional energy, fiscal expansion and debt risk, immigration and labor policies, political and debt management, etc.
These economic policies under the spirit of "America First" will pose significant challenges to the existing global trade and financial order, triggering unpredictable conflicts and chaos. Even domestically in the U.S., economic growth, illegal immigration, and financial systems will create seemingly irreconcilable contradictions.
Deporting illegal immigrants and raising tariffs may push up inflation, while federal interest rates remain high. Inflation rebound may hinder interest rate cuts. Without rate cuts, government fiscal expansion will undoubtedly face greater difficulty, and the high level of debt will further burden the U.S. government.
The Federal Reserve, which is in the process of interest rate cuts and balance sheet reduction, is also facing a dilemma. In November, the U.S. CPI showed a rebound as expected, while employment data and economic conditions remained good, indicating that the necessity for interest rate cuts has greatly diminished. Although the dot plot and the meeting minutes released by the Federal Reserve indicate that a 25 basis point rate cut in December is still highly probable, the rate cut process in 2025 is likely to slow down.
Powell hopes to uphold professionalism, maintain economic stability, and normalize inflation levels. However, Trump clearly aims to fulfill campaign promises through transformation and conflict—reducing corporate taxes and increasing import tariffs, providing more domestic jobs. The positions of the two are almost irreconcilable, and their contradictions have become public.
Although there is significant uncertainty, traders in various markets have begun to align and provide decision results—bullish on the U.S. economy, with the most optimistic outcome being "high inflation, high growth."
In November, the Nasdaq, Dow Jones, and S&P 500 recorded increases of 6.21%, 7.54%, and 5.74%, respectively, while the RUT2000, which represents small and medium-sized enterprises, recorded an increase of 11.01%, reaching a historical high.
Regarding U.S. treasuries, at the end of the month, long-term and short-term yields closed at 4.177% and 4.160%, respectively, both showing a slight decline, indicating that the bearish risk of U.S. treasuries has temporarily decreased.
The U.S. dollar index continued to rise, closing at 105.74 in November, up 1.02% from the previous month, while the euro, renminbi, and yen all depreciated against the dollar. In the future, global funds remain optimistic about the U.S. financial market, and the trend of purchasing dollar-denominated assets continues.
Correspondingly, gold, which receives global safe-haven funds, fell 3.41% in the month, recording the largest monthly decline in 14 months. As the post-pandemic era gradually emerges, liquidity is increasingly rampant, and the global risk appetite for funds is rising. Equity assets, as well as Crypto represented by BTC, are beneficiaries of this increase.
Crypto assets: BTC hits a historical high, Altseason could start at any time.
In November, BTC opened at $70,198.02 and closed at $96,465.42, with an increase of 37.42%, an amplitude of 47.12%, and effective trading volume expanding.
After returning to the "200-day moving average" and crossing the "downtrend line" in November, BTC continued to achieve a significant breakthrough in technical indicators this month, breaking through the upper pressure of the "new high consolidation zone" that had been stuck for eight months, and once again stepping onto the "uptrend line" after four months.
BTC daily price trend
On the monthly line, BTC achieved three consecutive months of gains with a continuously moderate increase in volume, showing a healthy upward trend.
BTC monthly price trend
In previous reports, we have repeatedly emphasized that over 30% of BTC has undergone address transfers in the new high consolidation zone from March to October this year. This upward repricing has repeatedly occurred in past cycles, becoming an internal structural support for future price increases.
The final breakthrough in price requires external conditions to trigger it.
The largest global event in November was Trump's re-election as president of the United States, and his previous enthusiasm for Crypto and the "commitments" made during the campaign have become the emotional catalyst for BTC breaking through the "new high consolidation zone" that had been stagnant for eight months.
Is the "Trump market" for BTC sustainable? EMC Labs believes that whether it is last year's proposed (21st Century Financial Innovation and Technology Act), this year's (U.S. Bitcoin Strategic Reserve Draft), or the recently passed (Bitcoin Rights Bill) by the Pennsylvania House, they all indicate that the U.S. adoption of Crypto is gradually shifting from "allowing" to "promoting," aiming to gain control over crypto assets represented by BTC and the blockchain industry (public chains, infrastructure, and decentralized application projects) through legal regulations and national strategies, ensuring the U.S. achieves a dominant advantage in this emerging track.
Therefore, in the coming years, support from U.S. policies and the adoption of Crypto by traditional institutions, including financial institutions and publicly listed companies, is expected to continue to rise. At no point in history have the blockchain industry and crypto assets received such strong acceptance and adoption.
Surging liquidity: The resonance of the two major channels creates historical records.
Continuous capital inflow is the material support for a bull market.
In November, a total of $25.9 billion flowed into BTC Spot ETFs and stablecoin channels, setting a record for the largest single-month capital inflow. Among them, the ETF channel accounted for $5.4 billion, and the stablecoin channel accounted for $19.5 billion. In November, the inflow of ETF funds exceeded that of February, becoming the month with the largest inflow.
Monthly statistics on capital flow in the crypto market
Since October, as the U.S. presidential election approached its conclusion, the first to activate was the ETF channel funds. This channel's inflow has gradually increased since September, with inflows of $1.2 billion, $5.4 billion, and $6.4 billion from September to November. We previously emphasized that the funds in the ETF channel possess independent will and will gradually control BTC's price trend. This has been fully reflected in recent market conditions.
Compared with the assertive "leader," the funds in the stablecoin channel seem to be somewhat late to respond. After entering November, the inflow began to show a significant increase only after BTC's price continuously broke through. However, the stablecoin channel's total inflow for the entire month reached $19.5 billion, far exceeding that of the ETF channel.
Daily statistics on capital flow in the crypto market
On November 22, the day BTC hit the $100,000 mark, market funds began to activate ETH, with a daily increase of 9.31%. In November, ETH's cumulative increase reached 47.05%, surpassing BTC, and the market seems to be opening up to Altseason.
EMC Labs believes that after BTC breaks the $100,000 mark, Altseason will gradually open up. Once Altseason opens, the market will gradually show: 1. ETH breaks historical highs; 2. The market rises generally; 3. The main market trends are gradually recognized.
Long-short game: Liquidity sparks the second wave of selling.
The cycle is a game of collecting and distributing chips that long and short hands engage in within a temporal and spatial range.
The long hands collect chips during the downtrend, bottoming, and recovery periods, while continuously selling during the uptrend and transition periods, until liquidity can no longer absorb the selling pressure, and the market welcomes a reversal.
Since January 2024, the long hands have initiated the first wave of large-scale selling, and after the market entered consolidation in March, it returned to a state of accumulating chips. In November, with liquidity recovering and prices reaching new highs, the long hands have started the second wave of selling, which is also the last wave of large-scale selling in this cycle.
15 years of BTC long hands selling history
As of the end of September, long hands held 14.22 million coins, and by the end of November, the selling position had reached 13.69 million coins, with a two-month "selling scale" of 530,000 coins.
During the uptrend, the motivation for long hands to sell is the price rise brought by liquidity, while the price rise is also a self-validating process for the market, which will trigger more capital inflows.
The second wave of selling by long hands has just been ongoing for two months, and with the continued increase in liquidity, it is expected to continue into the first half of 2025.
Conclusion
In November, the cycle once again demonstrated its powerful market adjustment capability.
EMC Labs believes that the fundamental reason for the rise in BTC and the entire crypto market lies in the complete internal structural consolidation, along with the continuous interest rate cuts by major global economies and a significant increase in investors' risk appetite. In addition, the substantial increase in adoption and expectations of U.S. national policies also provide significant emotional and material momentum.
We believe that these external factors will continue to provide momentum support for the crypto market in the coming year. Therefore, after the crypto bull market restarts, it will continue to rise, with some fluctuations in between, but the latter half of the uptrend is destined to provide richer returns for long-term investors.
— — — —
EMC Labs (Emerging Labs) was founded in April 2023 by crypto asset investors and data scientists. It focuses on research in the blockchain industry and secondary market investments in Crypto, with industry foresight, insights, and data mining as its core competitiveness, aiming to participate in the booming blockchain industry through research and investment, promoting blockchain and crypto assets to bring benefits to humanity.
