In the past week, BTC has continued to rise, breaking through $96,000, $97,000, $98,000, and $99,000 ATH successively. Market attention on BTC has returned to a peak, eagerly anticipating BTC to break through $100,000. Not only did BTC's Google search index soar, but Microstrategy also utilized its over-allotment rights for its convertible bonds, with its MSTR maturing in 2029 closing above $104 on the first trading day.
On the 23rd, after BTC broke through the ATH of $99,588, the market struggled to rise and fell to around $95,734. Although it rebounded to around $98,000, BTC entered a downtrend channel on the night of the 25th, hitting a low of $92,326.31, with a maximum drop of 6.5% in 24 hours. Currently, BTC price fluctuates around $93,000 (data from Binance spot market, November 26, 5:00 PM).
Although this time BTC experienced the largest correction in nearly half a month, the crypto market did not react as violently as before. Not only did ETH not follow the decline, but most altcoins did not enter a plummet either, with some even showing slight gains. As Trump is about to take office, BTC investors are cashing out, and the complex leverage effects may further increase BTC's volatility in the future.
BTC technical indicators have entered a short-term overbought stage, with some long-term holders realizing profits.
Since Trump's victory, BTC technical indicators have shown severe overbought conditions. Prior to this week, BTC was the only investment target in Trump's economy that had not yet seen profit-taking. As the public's FOMO sentiment intensifies, many long-term holders have chosen to cash out. Crypto Banter analyst Kyledoops pointed out that long-term BTC holders have sold 128,000 BTC, although BTC ETFs absorbed 90% of the selling pressure during the same period.
Market FOMO sentiment is excessively high; BTC price retracement may benefit future market development.
Microstrategy exercised its over-allotment rights of $400 million on top of $2.6 billion in convertible bonds (0% coupon, 55% premium), raising the final size to $3 billion. These convertible bonds maturing in 2029 closed at over $104 on the first trading day.
At the same time, the market quickly launched Microstrategy's leveraged ETFs (MSTX, MSTU), providing retail investors with more 'suboptimal' ways to leverage trade BTC spot. According to Bloomberg reports, the high demand for these leveraged ETFs has put pressure on the main brokers responsible for securities lending, with related asset management scales surging to nearly $5 billion in the past week.
Public opinion continues to boost BTC's visibility, as a well-known television commentator suddenly changed his stance to support cryptocurrency and suggested that investors could hold BTC at high points. The market's FOMO has further exacerbated the recent market bubble, resulting in a significant increase in leverage at current levels and leading to a substantial rise in actual volatility.
Macroeconomic Interpretation
Strong U.S. economic indicators increase the likelihood of a soft landing.
Data shows that over $448 billion has flowed into the U.S. stock market this year, breaking the 2021 record and reaching unprecedented levels. Meanwhile, Nvidia's earnings report exceeded expectations, and U.S. stocks remain strong. Economic indices have rebounded to strong first-quarter levels, while inflation data has not yet broken upward. The high-income consumer index has reached a new high, and the purchasing power of the (high-income) group in the U.S. remains strong. Data indicates that the likelihood of a soft landing for the U.S. economy has increased.
The Lebanon-Israel conflict may be nearing its end, with risk-averse funds withdrawing.
The Lebanon-Israel conflict is nearing its end, with risk-averse funds withdrawing. In addition to the cryptocurrency market, overnight markets for gold, oil, and other commodities also saw significant declines. As of the close of the night session on November 25, London gold, London silver, COMEX gold, and COMEX silver all fell more than 3%.
According to CCTV News, on November 25 local time, U.S. State Department spokesperson Matthew Miller mentioned the Lebanon-Israel ceasefire agreement during a briefing that day, stating that the ceasefire agreement 'has not yet been reached.' The U.S. believes that the gap in differing opinions between the two negotiating parties on the ceasefire agreement has 'greatly narrowed,' but some measures still need to be taken to facilitate its conclusion. The U.S. is pushing for negotiations 'as much as possible.'
On the 25th local time, Lebanese MTV reported exclusively that Lebanon has received a ceasefire notice from Israel, which will be announced tomorrow night. According to the Israeli Times, Israel has in principle agreed to reach a ceasefire agreement with Hezbollah with the support of the United States.
Trump's tariff comments have caused a massive shock in the foreign exchange market.
On the 25th local time, Trump announced that he would impose a 25% tariff on all products entering the U.S. from Mexico and Canada. The news caused the currencies of Canada and Mexico to drop more than 1% against the dollar, exacerbating volatility in the forex market, which sees daily trading volumes reaching $7.5 trillion, with emerging market currencies generally weakening. Commodity currencies such as the Australian dollar and New Zealand dollar also fell. Stock markets in the Asia-Pacific region were similarly under pressure, declining across the board.
Market Recommendations
The current market FOMO remains, and it is recommended that investors remain rational under the situation where overbought conditions have not significantly eased. Proper asset allocation should be conducted while ensuring risk control is solid, capturing profits while further avoiding risks. At the same time, given that Trump has previously transmitted unfiltered thoughts and policy intentions directly through social media, the market will be filled with a lot of speculation and contradictory trading ideas, making it very important to maintain flexibility in asset allocation.
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