Today is Saturday, November 30, 2024.
Google searches for Bitcoin are rising, and new retail investors are pouring into the market. However, this is only at a level similar to that at the beginning of the year, which can also be seen from the realized market value wave chart, which is very intuitive.
We also need more active short-term investors, and there is a strong correlation between retail trading activity in the Bitcoin market and price movements. Based on the trading conditions of the spot and futures markets, through comprehensive statistics of all exchanges and trading teams, as well as market data, when the price of Bitcoin rises significantly, retail trading activities gradually shift from neutral levels to high activity levels, and even Overheating will occur. This overheated retail trading activity, often marked as a small red dot, indicates the influx of retail money into the market. The current trading activities of retail investors have not yet entered the overheating stage, and Bitcoin has the potential to make further upward breakthroughs.
David, a hunting ground analyst at Ark, said in an interview with Queen's desk that Bitcoin is currently in the mid-stage of a bull market. He expects that by the end of this year, the target price of Bitcoin may reach between US$104,000 and US$124,000.
According to Burnstin, they raised the target price of MicroStrategy's MSTR stock to $600. As a leading indicator of Bitcoin prices, MicroStrategy's stock was previously heavily shorted, causing some retail investors to follow suit. Currently, MSTR is consolidating in the area of about $400, and Bitcoin is also pulling back near $100,000, accumulating further upward momentum. Bernsty believes that more and more small and medium-sized enterprises with idle cash may imitate MicroStrategy's investment strategy and allocate part of their funds to Bitcoin, thereby further promoting the growth of Bitcoin demand.
Metal Planet of Japan is one of them. A few days ago, I saw the news that Metal Planet was officially included in the world-renowned exchange-traded fund blog. It is worth noting that Block ETI is a fund focusing on the development of blockchain technology. Its core goal is to find and invest in companies that are leading in the development and application of blockchain technology through active management investment strategies. The constituent companies of the fund include Microstrategy, Robinhood, Nvidia and the like. The addition of Metaplanet will also enhance the influence of this Japanese company.
At the global national level, Bitcoin is likely to be included in the strategic reserve due to Trump's election as president. Seven years ago, Morocco explicitly banned the use of Bitcoin in the form of law, but seven years later, Morocco decided to fully legalize Bitcoin. Brazil has also begun to follow the footsteps of the United States, and the House of Representatives has proposed a Bitcoin Strategic Reserve Act. Globally, more and more countries and regions are beginning to seriously consider the possibility of incorporating Bitcoin into the strategic reserve system, which is very beneficial to Bitcoin. The dynamic relationship between demand and supply further supports Bitcoin's rising potential.
After the 10% drop on Thanksgiving Day, demand increased significantly, and whales were still actively adding to their positions during the price correction phase. Data shows that short-term investors panic-sold Bitcoin, with approximately $1.5 billion in funds taken over by Bitcoin-savvy accounts. Whales viewed the current price adjustment as an opportunity to buy on dips. The main sellers at this stage are long-term holders. Especially when short-term buying is at a disadvantage, Bitcoin will experience a large price adjustment. In the first half of the market, long-term holders accelerated the selling of their Bitcoins, causing certain market fluctuations. However, starting in April, this selling pressure gradually decreased. After that, the proportion of long-term holders’ supply increases because people who hold coins for more than 155 days are classified as long-term holders. Until Trump was elected as the President of the United States, the price of Bitcoin rose sharply in several waves, and long-term holders also accelerated the distribution process. Since mid-October, the second wave of chip exchanges has begun. Long-term holders sold 507,000 Bitcoins, which were taken over by short-term holders. In other words, spot ETI absorbed about 90% of the Bitcoins. Selling volume.
Since $100,000 is an important price barrier, there is a lack of more buying demand in the short term to drive the rise. Judging from the current data, the ETF trading days later this week saw inflows, but overall this week there was an outflow of funds. Perhaps in the trading days next week, we will see a recovery on the demand side.
Since the recovery in early 2023, the Bitcoin bull market has gone halfway. Interestingly, the Tai Cycle Top Indicator shows that the double of Bitcoin's 350-day moving average is currently pointing to $124,000, and of course it is still rising. As yesterday's headline said, the buyers handed over their chips, while the diamond hands have been firmly holding Bitcoin.
Judging from the funding rate in the futures market, compared with the overheated state at the high point in March, the current funding rate remains at a relatively low level. The market has not seen extreme bullish sentiment, that is, the phenomenon of over-leverage is not obvious, and the real spot buying demand seems to occupy a larger proportion. I think such an upward trend is also healthier and reduces the risk of market bubbles. If this wave of positive funding rate levels far exceeds the high point seen in March, it means that the market is over-leveraged, and we see that the price of Bitcoin has risen too quickly. There is not much support below $88,000, and perhaps the price of Bitcoin will fall more.
In terms of short-term trends, the $91,000 area supports Bitcoin's rebound, and Bitcoin's 20-day moving average has not been broken. If spot ETI resumes positive inflows next week, favorable conditions will be formed for the Bitcoin market. In addition, the balance of Bitcoin on exchanges continues to decline and has fallen to the lowest level since 2018. A large amount of Bitcoin is flowing out of exchanges, and the Bitcoin market has a strong willingness to hold for the long term.
From a cyclical perspective, the price-to-volume ratio of Bitcoin is used to assess the top and bottom of the market. Data shows that the trend of the Bitcoin price-to-volume ratio is in a long-term trend channel. The ratio has now entered an upward phase and is moving toward the top of the channel. The growth rate of Bitcoin prices must continue to be higher than the growth rate of trading volume, indicating that the market's valuation of Bitcoin is getting higher and higher. Although trading volume has increased, it is still limited compared to the increase in price. This phenomenon can usually be understood as market maturity and trading efficiency, especially in the past month, when the ratio has rebounded rapidly from a relatively low position. As the market's trading activity increases, the momentum for price increases is also increasing. In past cycles, when this ratio is close to the top of the trend channel, the market is often near a cyclical high, and when the ratio is close to the bottom of the channel, it means that the market may be undervalued. According to current data, it will take a long time for Bitcoin to peak.
Data analysis company lfractal pointed out that we also need to pay attention to the holding risk indicator. Simply put, it measures the confidence of long-term investors in the Bitcoin market and whether the current market price can make them feel that holding Bitcoin is worthwhile. I think it can be a balance between trust and price. When the price is very low, long-term holders feel that Bitcoin is undervalued, and they are more willing to continue holding rather than selling in large quantities to cash out. In this case, the corresponding indicator is in the green range, which means that the market opportunity is large and the risk is relatively small. In other words, the confidence of long-term investors is high, and the overall market risk is low. Price pullbacks are often opportunities to buy. Of course, I am only discussing this indicator. In fact, I will not encourage everyone to buy, because now is not a bear market stage, but a holding stage of the Bitcoin cycle. Back to this indicator, when the price of Bitcoin becomes very high, many long-term investors may feel that the spot market price of Bitcoin has risen to a level worth selling, their confidence will begin to decline, and the risk will naturally become higher. At this time, the indicator will enter the red area, which means that the market may be overheated and the risk is increasing. Long-term holders generally begin to cash out instead of continuing to hold. At present, the indicator has only slightly broken through the green trust zone. Investors' confidence in the market is increasing, and they are also willing to take more risks. From a historical perspective, whenever this indicator breaks out of the green zone, it usually ushered in a clear upward trend. Although it will also be accompanied by more short-term price adjustments, the overall trend of Bitcoin is still upward. A similar situation occurred in March this year. The current market environment is very similar to the early stages of the bull market in the past. Bitcoin still has more room for growth in the future.
At the same time, Bitcoin's market dominance has declined, which can be interpreted as market funds are flowing into altcoins. I also reported this in yesterday's video. After all, Ethereum has recently hit higher highs. The competition between altcoins and Bitcoin may intensify, and it will also bring about faster cyclical changes. Ethereum also has an MBRV score indicator, which seems to be in the same position as in 2020. Everything seems to be moving in the right direction.
