This morning, Bitcoin broke through the $106,000 mark, writing a new historical high, continuing the rally since Donald Trump, the U.S. presidential candidate, supported cryptocurrency. Since the U.S. election, Bitcoin has surged over 55% and has closed up for 7 consecutive weeks, setting the longest weekly winning streak since 2021.
With the market full of expectations for Trump's proposal to create a 'national Bitcoin reserve', and optimistic expectations for the Fed's interest rate cut this week, Bitcoin surged earlier today to $106,352, breaking the previous high set on December 5, and has now fallen back to $105,038, up 3% in the past 24 hours.
Ethereum's rally should not be underestimated either, reaching a high of $4,012.57 today, and as of this writing, it is at $3,950, with a 24-hour increase of 2.5%.
Trump's friendly attitude towards cryptocurrencies has completely reversed the high-pressure regulatory atmosphere of the Biden administration, becoming an important driving force for Bitcoin's rally. He not only proposed establishing a 'national Bitcoin strategic reserve' but also called for making the U.S. a leader in the global cryptocurrency industry, reigniting market expectations.
Such a policy direction is undoubtedly a catalyst for Bitcoin to break through sky-high prices and has driven the cryptocurrency market into a new round of frenzy.
'Investors are betting that the Trump administration will bring a more favorable regulatory environment,' and this confidence is also reflected in the strong demand for cryptocurrency ETFs. Since the U.S. election in November, ETFs that invest directly in Bitcoin have attracted over $12.2 billion in inflows.
The market sentiment indicator 'Greed and Fear Index' has soared to 83, entering the 'Extreme Greed' zone, indicating that investors have overwhelming confidence in the market.
However, the rally in Bitcoin may face correction risks, especially as the rate of increase slows, which may indicate that 'short-term pullback pressure is increasing.'
The U.S. Federal Reserve will hold an interest rate policy meeting on December 18, and the market generally expects a rate cut of 25 basis points (0.25 percentage points). If this expectation comes true, it will further push funds into the high-yield cryptocurrency market.
Today's historical high is exciting on the surface, but in reality, it was a struggle. Based on Coinbase's premium, this surge in the morning brought the premium down, indicating that it wasn't purchased with real money, but rather achieved through contract liquidations and long positions accumulation.
At the same time, altcoins have not shown widespread wealth effects, indicating that demand in the market is rapidly depleting and liquidity is starting to tighten.
Looking at the long positions in contracts, a large amount of long positions has accumulated above $100,000, which is definitely short-seller fuel. Therefore, it is extremely difficult to continue the upward push in the short term unless there is a massive buying spree when the U.S. stock market opens tomorrow, which is rare before Christmas.
Now at the $105,000 level, if you ask me whether it will 'rush to $110,000' or 'pull back to around $100,000', I might lean towards the latter, but after the pullback, it could still surge past the previous high again. Right now, it is certainly tormenting contract funds; as soon as one side has a lot of funds, they will be guided to liquidate.
In short, remember to respect the market; losing control often precedes huge losses. We won't predict where this trend will peak, perhaps at $110,000 or even $120,000, but the space is already limited. As for those trading altcoins, setting stop-loss orders is the top priority; experiencing the feeling of being at the top of the mountain is something to avoid in this lifetime.