The information, opinions, and judgments regarding markets, projects, and currencies mentioned in this report are for reference only and do not constitute any investment advice.
The cycle's giant wheel turns, propelling a market that was once filled with fear and hesitation into a new phase, with trading heating up suddenly.
As we predicted in our October report (10.89% monthly increase, BTC may reach new highs after the chaos of the U.S. election): After the internal consolidation of the crypto market was completed, this month welcomed an external triggering point—the conclusion of the U.S. presidential election on November 6, where Republican candidate Trump, who holds a friendly attitude towards Crypto, won, leading to continuous new highs in BTC prices, approaching $100,000.
The resolution of this major annual event has allowed traders across various financial markets to gradually emerge from chaos and uncertainty, returning to a set trading rhythm, with U.S. stocks resuming their upward trend. Expectations of 'Trump's economic policy' have become a major trading point, with Tesla, MicroStrategy, and others being the biggest gainers.
BTC, amid the downturn at the end of October, suddenly surged, breaking through multiple technical resistances such as the 'new high consolidation area' and the 'uptrend line', continuously setting new historical highs, peaking at $99,860, with a significant monthly increase of 37.42%.
With the trading market heating up, November saw a massive influx of capital, recording $25.9 billion for the month, the largest monthly inflow in the history of the crypto market.
As BTC approached the $100,000 mark, sustained capital inflows finally triggered a surge in Altcoins represented by ETH, leading to a broad market rally.
EMC Labs, combining multi-dimensional judgments, believes that the second wave of the crypto market's 'upward phase' has already started, and funds in the market will gradually flow into Altcoins, forming a broad upward trend.
The high inflation that could be triggered by 'Trump's economic policy' and the conflict with the ongoing rate cuts by the Federal Reserve present the greatest uncertainty. However, this uncertainty is merely a discord within the larger certainty and is insufficient to change the market's operational trend.
Macroeconomic Finance: Trump's Economic Policy
"Trump's economic policy" mainly includes tax cuts and deregulation, protectionist trade policies, energy independence and support for traditional energy, fiscal expansion and debt risks, immigration and labor policies, and political and debt management.
These economic policies guided by the 'America First' spirit will pose a significant challenge to the existing global trade and financial order, leading to unpredictable conflicts and chaos. Even within the United States, there will appear seemingly irreconcilable contradictions regarding economic growth, illegal immigration, and the financial system.
Deporting illegal immigrants and raising tariffs may push up inflation, while federal interest rates remain high, causing inflation to rebound, making rate cuts potentially obstructed. Without rate cuts, the difficulty of government fiscal expansion will undoubtedly increase, with high levels of debt further burdening the U.S. government.
The Federal Reserve, currently in a process of interest rate cuts and balance sheet reduction, is also facing difficulties. In November, the U.S. CPI saw a predictable rebound, while employment data and economic conditions remained good, indicating that the necessity for rate cuts has significantly diminished. Although the dot plot and the minutes from the Federal Reserve's meetings suggest that a 25 basis point cut in December is still likely, the process of rate cuts in 2025 is expected to slow down.
Powell hopes to uphold professionalism, maintain economic stability, and normalize inflation levels. However, Trump clearly aims to fulfill campaign promises through reform and conflict—reducing corporate taxes and increasing import tariffs while providing more domestic jobs. The proposals of the two are nearly irreconcilable, and their contradictions have become public.
Despite significant uncertainties, traders across various markets have already taken positions and made decisions—bullish on the U.S. economy, with the most optimistic outcome being 'high inflation, high growth.'
In November, the Nasdaq, Dow Jones, and S&P 500 recorded increases of 6.21%, 7.54%, and 5.74%, respectively, while the RUT 2000, which represents small enterprises, recorded an 11.01% increase and set a historical high.
Regarding U.S. Treasuries, the long-term and short-term yields closed at 4.177% and 4.160% at the end of the month, both recording slight declines, indicating that the bearish risk of U.S. Treasuries has temporarily diminished.
The dollar index continued to rise, closing at 105.74 in November, up 1.02% from the previous month. Meanwhile, the euro, RMB, and yen have all depreciated against the dollar. The trend of global funds favoring the U.S. financial market and purchasing dollar-denominated assets continues.
Correspondingly, the gold, which has absorbed global risk-averse funds, fell by 3.41% within the month, marking the largest monthly decline in 14 months. As we gradually step out of the post-pandemic era, liquidity is increasingly rampant, and the global risk appetite for funds is on the rise. Equity assets, as well as Crypto, represented by BTC, are the beneficiaries of this increase.
Crypto Assets: BTC Historical New Highs, Altseason Ready to Launch
In November, BTC opened at $70,198.02 and closed at $96,465.42, with an increase of 37.42%, a volatility of 47.12%, and effective volume expansion.
Following the return to the '200-day moving average' and the breach of the 'downtrend line' in November, BTC continued to achieve significant breakthroughs in technical indicators this month, breaking through the upper resistance of the 'new high consolidation area' that had been stuck for 8 months and re-entering the 'uptrend line' after a 4-month hiatus.
BTC daily price trend
On a monthly basis, BTC achieved a three-month consecutive increase with steadily expanding volume, showing a healthy upward trend.
BTC monthly price trend
In previous research reports, we have repeatedly emphasized that from March to October this year, over 30% of BTC in the new high consolidation area experienced address transfers, and this upward repricing has repeatedly occurred in past cycles, becoming internal structural support for future price increases.
The final breakthrough in price, however, requires external conditions to catalyze it.
The biggest global event in November was Trump's reelection as President of the United States, and his earlier enthusiasm for Crypto, along with the "promises" made during the campaign, became a catalyst for BTC to break through the 'new high consolidation area' that had been stagnant for eight months.
Is the 'Trump market' for BTC sustainable? EMC Labs believes that whether it is last year's proposed (21st Century Financial Innovation and Technology Act), this year's (U.S. Bitcoin Strategic Reserve Draft), or even the recently passed (Bitcoin Rights Bill) by the Pennsylvania House of Representatives, all indicate that the U.S. adoption of Crypto is gradually shifting from 'allowing' to 'promoting', aiming to gain control over crypto assets represented by BTC and the blockchain industry (public chains, infrastructure, and decentralized application projects) through legal regulations and national strategy support to ensure the U.S. gains a dominant advantage in this emerging field.
Therefore, support from U.S. policies in the coming years and the adoption of Crypto by traditional institutions, including financial institutions and publicly listed companies, is expected to continue to rise. At no point in history has the blockchain industry and crypto assets received such a high level of acceptance and adoption.
Liquidity is surging: Two major channels resonate to create historical records
Continuous capital inflows are the material support for a bull market.
In November, the total inflow of BTC Spot ETF and stablecoin large channels reached $25.9 billion, setting the record for the largest single-month capital inflow ever recorded. Among them, the ETF channel saw an inflow of $5.4 billion, while the stablecoin channel saw $19.5 billion. November was the month with the largest inflow for ETF funds in over two months.
Monthly statistics of capital flow in the crypto market
Since October, with the U.S. election nearing its conclusion, the first to initiate was the ETF channel funds. The inflow scale of this channel began to gradually expand since September, with inflows of $1.2 billion, $5.4 billion, and $6.4 billion from September to November. We previously emphasized that the funds in the ETF channel possess independent will and will gradually control the price trend of BTC. This has been fully reflected in the recent market.
In comparison to the 'leading brother' who takes on heavy burdens, the inflow of stablecoin funds appears somewhat slow to respond. After entering November, stablecoin inflows began to surge only as BTC prices continued to break through. Nonetheless, the total inflow of stablecoin funds reached $19.5 billion for the month, far exceeding ETF inflows.
Daily statistics of capital flow in the crypto market
On the day BTC attempted to breach the $100,000 mark on November 22, funds in the market began to activate ETH, which saw an increase of 9.31% that day. By the end of November, ETH's cumulative increase had reached 47.05%, surpassing BTC, suggesting that the market is opening up to Altseason.
EMC Labs believes that in the future, once BTC breaks the $100,000 mark, Altseason will gradually open up. Once Altseason opens, the market will gradually present: 1. ETH breaks historical highs; 2. The market experiences broad increases; 3. The main line of the market will gradually be recognized.
Long and short speculation: Liquidity triggers the second wave of sell-offs
The cycle is a game of collecting and distributing chips by long and short-term holders within a time-space range.
Long-term holders collect chips during the downward, bottoming, and recovery phases, while they engage in continuous sell-offs during the upward and transitional phases until liquidity can no longer absorb the selling pressure, leading to a market reversal.
Since this cycle began in January 2024, long-term holders initiated the first wave of large-scale sell-offs. After the market entered a consolidation phase in March, they returned to a state of accumulating chips. In November, as liquidity recovered and prices hit new highs, long-term holders initiated the second wave of sell-offs, which is also the last large-scale sell-off of this cycle.
15 Years of BTC Long-Term Holder Sell-Off History
As of the end of September, long-term holdings were 14.22 million coins, and by the end of November, the sell-off holdings reached 13.69 million coins, with a two-month "sell-off scale" of 530,000 coins.
During the upward phase, the motivation for long-term holders' sell-offs is the price increase brought about by liquidity, while the price increase simultaneously serves as a self-affirming process for the market, triggering more capital inflows.
The second wave of sell-offs by long-term holders has just occurred for 2 months, and with the continuous increase in liquidity, it is expected to continue in the first half of 2025.
Conclusion
In November, the cycle again demonstrated its powerful market adjustment capability.
EMC Labs believes that the fundamental reason for the rise in BTC and the entire crypto market is that, based on a well-structured internal arrangement, the continuous interest rate cuts by major global economies and the significant increase in investors' risk appetite are the underlying causes. Additionally, the substantial increase in adoption and expectations of U.S. national policies provide significant emotional and material momentum.
We believe that these external factors will continue to provide supporting momentum for the crypto market in the coming year. Therefore, the crypto bull market, once restarted, will continue to rise, with some bumps along the way, but the latter half of the upward phase is bound to provide richer returns for long-term investors.
EMC Labs was established in April 2023 by crypto asset investors and data scientists. It focuses on blockchain industry research and crypto secondary market investment, with industry foresight, insights, and data mining as core competencies, aiming to participate in the thriving blockchain industry through research and investment, promoting blockchain and crypto assets for the well-being of humanity.
For more information, please visit: https://www.emc.fund
