“The quality of your decisions depends on the information you have and your ability to process it.
——Redd Leo, founder of Bridgewater Associates (Principles)”
Bitcoin is under increasing pressure and is being squeezed. When the price hovers at the psychological resistance level of $100,000, the market is extremely greedy. This kind of emotion usually indicates that an adjustment is about to occur!
At the time of writing this article, the price of Bitcoin has fallen to $97,060, and there is a high probability that it will fall below 97,000 yuan. However, in a bull market, a 5%-15% price drop can be regarded as a normal and healthy correction!
By the end of 2024, the price of Bitcoin has the potential to break through the psychological resistance level of $100,000. If it successfully breaks through, it will be a strong bullish signal, but it still faces high challenges to cross this psychological price level. If Bitcoin reaches $100,000, it will mean an increase of 1,251% in the past five years, an increase of 124% so far this year, and an increase of 47% in the past month.
As this chart shows, year-over-year growth is currently strong! – Analyzing how the current bull market environment differs from previous bull markets helps us stay calm in the market.
Compared with the cycles after each halving in Bitcoin’s history, the trend of Bitcoin in this halving cycle obviously lags behind the performance of the previous three halving cycles.
With Trump's election as president, the possible implementation of tax cuts will affect the demand for Treasury bonds. If spending fails to decrease accordingly, the fiscal deficit may widen and the Treasury market will face greater pressure. Therefore, in a high inflation environment, investors are more inclined to turn to hard assets such as Bitcoin.
In the stock market, the current bull run has only lasted 25 months, while the historical average bull run lasted 67 months. Data shows that there is still plenty of upward momentum to catch up with historical trends. Currently, the correlation between Bitcoin and the stock market remains high.
In addition, the U.S. Blockchain Association urged Trump, the newly elected U.S. president, to take action within the first 100 days of his term to support the U.S. crypto industry - the association's recommendations mainly include establishing a comprehensive digital asset regulatory framework, ending discriminatory banking practices for cryptocurrency companies, and reappointing leadership of major federal agencies including the U.S. Securities and Exchange Commission (SEC) and the Treasury Department.
Note: All content represents the author's personal views only, is not investment advice, and should not be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice on tax consequences.
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