Source: Huali Huawai
With Trump's victory in the U.S. elections the day before yesterday, today (November 8), the Federal Reserve has lowered the benchmark interest rate by 25 basis points to 4.50%-4.75% (the second cut this year, in line with market expectations). Market sentiment continues to soar, and Bitcoin has repeatedly broken historical highs, reaching $76,990.
Although the results of the U.S. elections will have a long-term impact on the crypto market, we should not overlook the short-term volatility risks. In the recent fluctuation of Bitcoin's price, over the past 24 hours, the crypto market saw liquidations exceeding $348 million, with more than 96,000 people liquidated. Meanwhile, the open interest of Bitcoin on exchanges has reached a historical high of $46.6 billion, which usually indicates that there may be greater volatility or that a short-term peak has been reached. Please avoid FOMO and stay away from leverage.
In our previous article (November 5), we mentioned that the crypto market has never lacked hotspots, and almost every period, a new important event becomes the focus of attention and discussion. Now, with the U.S. elections in November and the second interest rate cut by the Federal Reserve approaching, people are likely to start looking for or focusing on the next new event.
From a short-term perspective: the reason why Bitcoin's price can break through historical highs is mainly due to the emotional impact brought about by Trump's victory in the U.S. elections, which we have elaborated on in previous articles. At this stage, the leverage in the crypto market has significantly increased, so we cannot rule out the possibility of short-term adjustments.
From a medium to long-term perspective: as we have forecasted in previous articles, with Bitcoin's breakthrough, a new round of bull market has arrived. Although the short term may face some adjustments, this is normal because the market cannot rise in a straight line; there will always be some adjustments along the way. However, if you are still on the sidelines at this stage and are thinking about waiting to buy Bitcoin below $40,000, you will likely continue to miss this bull market.
So, how high can Bitcoin's price reach in this bull market?
In fact, we have had some thoughts and speculations about this issue since 2022. Although I personally am reluctant to discuss any market predictions or price forecasts too much, as a blogger, I understand that many people (especially newcomers) enjoy such content, so I will occasionally do some market analysis or price predictions (speculations).
As for the price of Bitcoin, for example, in the article on February 14, 2024, we briefly thought about the market trends from four different dimensions. At that time, we further made a subjective prediction for BTC's price, leaning towards a bullish market price range of $100,000–$120,000, and this range will also be where I start to consider selling in batches. As shown in the figure below.
Of course, we still hold that old saying: the market is unpredictable, and all so-called predictions are merely guesses made by different people based on historical experience, data, etc. The logic here should not be to look at what others say, because everyone's risk tolerance, position situation, personal experiences, etc., are different. You should make reasonable plans and strategies based on your situation.
Currently, our personal expectation (speculation) for Bitcoin to reach $100,000–$120,000 within this cycle remains unchanged. However, with Trump's victory leading to a rapid breakthrough of Bitcoin's historical high, combined with potential new positive measures he might take towards the crypto market (such as making BTC a strategic reserve asset for the U.S.) and the ongoing expectation of continued interest rate cuts by the Federal Reserve, we even believe Bitcoin could potentially reach $150,000 next year (2025).
So, how high can Ethereum's price reach in this bull market?
As mentioned above, if Bitcoin really rises above $150,000 next year, then optimistically speaking, ETH has a great chance of possibly reaching $12,000, and SOL may also exceed $450. Some altcoins theoretically could have a 5–10 times growth potential. If we speculate according to our previous Bitcoin price range of $100,000–$120,000, then ETH's possible price would be $8,000–$10,000, and SOL's possible price would be $300–$400. Of course, this is merely a personal guess based on Bitcoin's fundamentals and should not be taken as any investment advice.
At the same time, we will also see some positive influencing factors from other aspects, such as:
- The rise of Coinbase stocks
With Trump's victory, the pent-up demand seems to be clearly reflected. Although traditional off-market funds may not consider participating directly in the crypto market for various reasons, the recent rise in Coinbase stocks also indicates some issues. As shown in the figure below.
Apart from the performance of Coinbase stocks, another point we need to consider is that since Coinbase (including the Base chain) and its derivatives (such as staking, DeFi) are fundamentally closely linked to Ethereum, the price expectations suggest that although ETH's price is lagging behind Coinbase's performance, it may gradually eliminate this gap in the near future.
Moreover, don't forget that currently, ETH is still the only tool with an ETF product aside from BTC. At this stage, Bitcoin continues to set historical highs, and Solana also broke its historical high today (November 8), and ETH is also worth our continued expectation.
- CEX is experiencing a large inflow of stablecoins
On the day after the U.S. elections, the inflow of stablecoins into exchanges such as Binance and Coinbase reached a cumulative $9.3 billion, marking the second-largest inflow of ERC-20 stablecoins since their inception. Generally speaking, this is a very positive signal because a significant portion of this capital may be used to purchase BTC or altcoins. As shown in the figure below.
Historically, the massive inflow of funds and subsequent upward trends from September 2020 to February 2021 occurred simultaneously with the bull market rebound. If history can repeat itself, then the current influx of capital may similarly trigger a corresponding upward trend, and the crypto market may experience another bullish rebound.
Additionally, we must mention the issue of MemeCoins again. In our previous article, we noted that it seems the trend of MemeCoins is also at a stage peak, and we may soon see the potential for some altcoin narratives to rotate rapidly.
As Bitcoin continues to break historical highs this week, I found that some projects under the DeFi category have indeed rebounded well, such as UNI, AAVE, etc. As shown in the figure below.
Previously, due to some regulatory pressures from the SEC, it seemed that many altcoins, aside from BTC, were considered to have securities attributes, which prevented many altcoins from being used for normal speculation in the U.S. market. However, with Trump's inauguration, perhaps these issues may see some new changes.
We expect that before the first or second quarter of 2025, some altcoins may be re-focused and speculated on by funds, and then some liquidity in MemeCoins may flow back into altcoin narratives. However, during this process, due to the particularity of this round of MemeCoin narrative, we may continuously see the emergence of a few Memes that lead to wealth, but the probability of a large-scale MemeCoin cycle and explosive growth will be significantly reduced.
In summary, from a medium to long-term perspective, we continue to maintain an optimistic outlook on the overall development of the market. Regardless, we firmly believe that Bitcoin will eventually reach over $100,000. However, you should also pay attention to short-term fluctuations. This week or in the coming weeks, with the elections and interest rate cut expectations coming to fruition, the market may experience sideways consolidation or a short-term decline.
Bull markets seem to allow everyone to make money, but many people often lose money in the later stages of a bull market. It is important to have a good plan and position management. If it is a short-term operation, be sure to set take-profit and stop-loss levels. If you are still on the sidelines and want to seize the last opportunity of this bull market, then you need to seriously think about and adjust your strategy now, because bull markets do not last forever.
