Since Trump won the U.S. election, the crypto market has once again experienced explosive growth with heightened market sentiment. As the leader of the cryptocurrency market, Bitcoin saw a monthly increase of over 37% in November, appreciating more than $26,000, driving the overall market capitalization to surge over $1 trillion, an increase of about 45%. Meanwhile, the altcoin sector also entered a long-awaited 'altcoin season' with impressive performance. The total market capitalization of altcoins surged nearly 70% unilaterally in November, especially for established altcoins like $XRP, which surged 400% in a single month, reaching a historical high due to multiple positive factors. Against the backdrop of overall market enthusiasm, whether Bitcoin can break $100,000 in December has become the focus of attention from all parties.
Bitcoin is consolidating, while altcoins are surging.
After continuously setting new historical highs, Bitcoin faced resistance at the $100,000 mark at the end of November, entering a period of consolidation. This stagnation prompted funds to shift towards the altcoin sector, creating a clear sector rotation effect. In the past week, the market share of altcoins rose from 8.91% to 11.0%, and the daily trading share also climbed from 23% to 37%. This phenomenon reflects that market funds are seeking new breakout points, with altcoins, due to their lower circulating market capitalization and sector rotation effect, becoming a popular area for capital inflow.
XRP is the standout performer among altcoins this season. Driven by positive news such as the resignation of the SEC chairman, spot ETF applications, and increased holdings by Korean whales, its monthly increase reached 400%. Not only did its market capitalization surpass $USDT and $Solana, but it also ranked 138th among global mainstream assets. XRP's surge has reshaped the market's valuation of altcoins, opening up significant imaginative space for other altcoins and driving enthusiasm across the entire sector.
Will Bitcoin break $100,000 in December?
Despite the astonishing rise of Bitcoin in November, there was some profit-taking pressure as it approached the psychological barrier of $100,000. However, multiple positive factors indicate that Bitcoin still has considerable upward potential in December.
U.S. stock market's Santa Claus rally boosts market sentiment.
The approach of the holiday season is usually accompanied by the 'Santa Claus rally' in the U.S. stock market, where stock prices generally rise around Christmas. This increase is influenced by holiday optimism, increased consumer spending, and year-end trading by investors. Data shows that since 1950, the average increase of the S&P 500 index during this period is about 1.3%. Due to the high correlation between the U.S. stock market and the crypto market, this optimism may provide external support for Bitcoin to rise further in December.
Seasonal upward trend during the halving cycle.
Historical data shows that December after Bitcoin's halving is often a peak period for price increases. In the halving cycles of 2012, 2016, and 2020, the increases in December were 7%, 30.8%, and 46.92%, respectively. Bitcoin will experience a new halving cycle in 2024, and this September, Bitcoin achieved its best performance for the same month in history, with an increase of 7.35%. Based on historical patterns, Bitcoin's performance at the end of the year usually continues to rise, which adds confidence to the potential of breaking $100,000 in December.
Federal Reserve rate cuts boost risk assets.
The Federal Reserve's monetary policy has a profound impact on the market. In September and November 2023, the Federal Reserve lowered interest rates by 0.5% and 0.25%, respectively, boosting market sentiment. In December, the Federal Reserve is likely to continue lowering interest rates, injecting more liquidity into the market. This accommodative monetary environment will prompt funds to flow out of low-yield assets and into crypto assets with greater appreciation potential. As a bellwether of the market, Bitcoin is expected to attract more funds.
Market speculation frenzy before Trump's presidency.
Trump's policy stance is particularly important for the crypto market. His cabinet is almost 'fully crypto-friendly,' significantly enhancing market expectations for future policies. Combined with the market performance after Trump's victory in 2016, the crypto market often peaks before his inauguration. It is expected that this factor will continue to have a significant impact on the market in December.
ETF and on-chain funds continue to flow in.
ETF fund inflows are an important driving force behind this round of Bitcoin's rise. In November, net inflows into Bitcoin and Ethereum ETFs reached $6.5 billion and $1.1 billion, respectively, setting a historical record. In addition, the issuance of stablecoins is also accelerating, with USDT's issuance exceeding $13 billion in November, indicating that funds are flowing significantly into the crypto market. The continuous inflow of on-chain funds further solidifies the foundation for Bitcoin's continued rise in December.
The surge in November brought Bitcoin and the altcoin sector a long-awaited spotlight. Although Bitcoin temporarily faced resistance at the $100,000 mark, considering multiple positive factors such as U.S. stock market sentiment, the halving effect, Federal Reserve policy, and ETF fund inflows, Bitcoin still has the potential to break historical highs in December. Meanwhile, the rotation effect of altcoins will continue to provide investors with more opportunities.
Whether it’s Bitcoin's breakthrough or altcoins' explosion, December will be a key month worth looking forward to in the crypto market.
