Today is November 19, 2024, Tuesday.
Bitcoin continues to hover within a range, but in the past 24 hours, we have seen an increase in volatility. According to media reports, many companies have further increased their holdings of Bitcoin. Leading the way is MicroStrategy, which has purchased another $4.6 billion worth of Bitcoin. Previously, Sailor's tweet had hinted at this, suggesting that more 'green ladies' are needed, meaning they will buy more Bitcoin, which is also part of the $42 billion purchase plan. As expected, they have increased their holdings by 51,780 bitcoins.
It is worth noting that MicroStrategy's recent purchases over the past two months seem to have exceeded the total amount of the past three years, with a single purchase of $4.6 billion being the largest ever for MicroStrategy. Moreover, Sailor has not stopped, as they continue to raise funds to purchase more Bitcoin. Since announcing a plan to buy $42 billion worth of Bitcoin over the next three years, MicroStrategy has purchased $6.6 billion worth of Bitcoin in just about two weeks, at a very fast pace.
Due to MicroStrategy's recent two rounds of increased holdings, their overall average purchase price has risen to $50,000, with a total of only 331,200 bitcoins, further driving up MicroStrategy's stock price, which has now far exceeded the high point during the dot-com bubble.
Meta planet has also taken new actions, issuing a one-year bond totaling 1.75 billion yen, with an annual interest rate of 0.36%. This bond is a fixed-income investment tool, with Meta planet promising investors to repay the principal at maturity and pay fixed interest during the bond's term, while Meta planet will use the raised funds to further purchase more Bitcoin.
Artificial Intelligence AI company Genius group, they have also purchased 110 bitcoins, which also includes summer scientific, who just increased their holdings by 215 bitcoins.
On the other hand, spot Bitcoin ETF options trading is about to be launched. According to two analysts from Bloomberg, it is very likely to happen today or within this week, and investment is becoming more diversified, which is also beneficial for enhancing overall market liquidity. After Fed Chairman Powell's hawkish remarks, the spot ETF market experienced two days of outflows last week, and it seems that the spot ETF has resumed liquidity. The upcoming launch of spot Bitcoin ETF options trading has generated new expectations in the market.
Currently, Bitcoin in the $90,000 range seems somewhat similar to when it was at $70,000, needing a new wave of upward momentum to push Bitcoin prices to higher levels. After breaking through $93,500, Bitcoin may further rise, beginning to approach $100,000.
As a market barometer, Bitcoin continues to attract a large inflow of funds. As the most direct liquidity indicator of the cryptocurrency market, the supply of stablecoins is rising, and at the same time, trading volumes on cryptocurrency exchanges are also increasing, with some funds starting to flow into the altcoin market, particularly with meme coins performing even better. According to Google Trends data, meme coins' search volume has reached a historical high. Apart from Bitcoin, some hot topics are being occupied by meme coins.
Of course, other altcoins have not completely lost their opportunities; it is just that the current market liquidity is temporarily concentrated on certain specific assets. It can be seen that Bitcoin's dominance is about 60%, and it may continue to rise, with Bitcoin prices also rising in tandem. Some viewpoints suggest that Bitcoin's dominance could approach 70%. Many early entrants have substantial unrealized profits in the Bitcoin market, and with Bitcoin very close to $100,000, everyone is now looking forward to the arrival of $100,000, causing Bitcoin's dominance to continue to rise, while altcoins have not yet garnered enough attention, instead, the meme coin sector is somewhat hot.
Of course, this is not bad news. Meme coins have a very strong appeal to retail investors, and some people can gain huge profits in a short time, which will attract more retail investors into the market, benefiting the cryptocurrency market. Bitcoin must rise to a higher position, reaching the ideal price level for more people, before they will withdraw large amounts from the Bitcoin market, and the altcoin season will follow suit, which is expected to appear in the first half of next year. In the remaining more than a month of the fourth quarter, Bitcoin should continue to rise.
On the other hand, according to on-chain data, long-term holders have begun gradually distributing their bitcoins since mid-October. This distribution behavior of long-term holders is a core part of the chip redistribution in the Bitcoin market, typically occurring in the early stages of a bull market. Whether it was at the beginning of this year or earlier Bitcoin cycles, we can see this clearly; these bitcoins have effectively reached new investors' hands.
At the same time, market sentiment has further fermented under the influence of social media. The most direct indicator of human emotion is the Google search trends related to cryptocurrency and the download volumes of some crypto applications, including the views of YouTube videos. Although the view counts of crypto-related videos have not yet surpassed the highs of the previous bull market, this gradual growth trend indicates that the market is re-attracting more followers.
Another point is that the total market capitalization of the cryptocurrency market has reached a new high. Without the push of spot ETFs, perhaps the recent waves of significant growth after the presidential election could be considered a true breakthrough of historical highs. Cycles certainly do not repeat completely, but there are indeed many similarities.
Currently, it seems that the second half of the bull market is still in the early stages, with Bitcoin prices significantly rising and the number of open contracts also climbing. The funding rates in the futures market have also risen and fallen, reflecting strong expectations in the market for further increases. However, a positive point is that although the number of open contracts continues to increase, funding rates have shown a declining trend, indicating that the bullish and bearish forces in the market are tending to balance, not all participants are betting on rising prices, which reduces the possibility of severe adjustments due to excessive speculation.
Earlier yesterday, I saw news that a presidential candidate in Poland proposed including Bitcoin in the national reserve, which shows a trend similar to that of the US presidential election. Although this Polish candidate has limited influence on the international political stage, this proposal symbolizes that Bitcoin itself is gradually becoming mainstream and even being incorporated into national-level economic strategies, much like the approval of spot ETFs in the US led other countries to follow suit.
However, it is somewhat regrettable that the data seen on Polymarket is not very satisfactory regarding whether Trump will fulfill his promise to include Bitcoin as a strategic reserve asset, with the current prediction market betting only a 33% chance, but this probability will continue to change, and I will keep an eye on this point.
In addition, a key data point reflecting the fundamentals of the Bitcoin market is the Bitcoin balance on exchanges, which has fallen to its lowest level since November 2018, and the amount of Bitcoin available for trading on exchanges is decreasing. By monitoring the liquidity trend from different sources, especially the long-term holders of Bitcoin and the role of miners in Bitcoin supply, it can be seen that since the genesis block of Bitcoin, the share of miners in the circulating supply has been continuously declining, while the proportion of long-term holders redistributing liquidity, represented by the red area, has been gradually increasing, becoming the dominant source of liquidity in the current market.
Over time, the role of miners in Bitcoin supply has gradually weakened but still plays an important foundational role. The liquidity provided by miners is gradually decreasing, while the dominance of long-term holders is rising, indicating that the dynamics of market supply are increasingly dependent on the behavior of long-term holders. Combined with the decreasing amount of Bitcoin available for trading and the growing purchasing demand in a bull market, the so-called supply shock effect will occur.
Since Trump was elected president of the United States, the inflow of stablecoins into exchanges has also seen a significant increase recently, with Tether issuing another $1 billion USDT, enhancing on-chain liquidity, which will ultimately drive the market further up.
It is worth noting that the ongoing second wave of chip turnover has seen long-term holders sell only about 1/3 of the amount at the beginning of the year in the past month, while short-term holders, or new retail investors, have absorbed these sold bitcoins.
The MVRV score indicator that I often monitor is different from previous cycles. The current MVRV score is still below 3, indicating that we still have a lot of upward space. In this context, I saw yesterday that the CEO of Cryptocont mentioned he revised his earlier short-term price adjustment forecast and believes the bull market is still ongoing, predicting the target price for Bitcoin in this bull market to be around $135,000, and of course, this upper limit will be raised in the future.
It is worth mentioning that the average purchase cost line for short-term holders has officially broken through the $70,000 barrier. From the historical cycles of Bitcoin, a bull market typically enters about 200 days after a halving, which is also the phase the market is currently in. Usually, even if Bitcoin's price experiences a significant pullback, it only approaches this cost line, and it is relatively difficult to fall below it. Bitcoin's price will continue to rise, and if we see a situation where it breaks the short-term cost line next time, we need to be alert, as it may indicate that the bull market is nearing its end.
Of course, it is uncertain whether we will see a win-win situation next year, which is also a topic of much discussion in the market. Some investors believe that the bull market will end in the first half of the year, while another group of investors, including myself, leans towards the view that the bull market will end in the second half of 2025. Alflecto provides a more intuitive perspective, believing that the bull market will end in the second half of next year, around mid-October 2025, and after that, we will enter a bear market. The cost line for short-term holders will become a resistance level, and when Bitcoin falls below the long-term holders' cost line, it means we have entered a deep bear market, which would be the best opportunity to buy Bitcoin in batches.
