According to ChainCatcher, Bitfinex released a report stating that 'Bitcoin is approaching the historic $100,000 milestone, driven by unprecedented capital inflows into Bitcoin ETFs and strong institutional demand. Although it faced profit-taking resistance at its latest historic peak, Bitcoin has shown resilience, remaining around $96,000 over the weekend and recovering some upward momentum in early Monday trading. Since the pre-U.S. presidential election low of $66,880, Bitcoin has risen by 47%, and it has astonishingly increased by 130% year-to-date, opening up new territory. The performance of Bitcoin compared to traditional assets is undeniable: Bitcoin's market cap has now surpassed Saudi Aramco, becoming the seventh-largest asset globally, with a valuation exceeding $1.9 trillion at its peak.
Despite the impressive upward momentum of Bitcoin, it has not been without profit-taking from long-term holders. Although pressure has increased, the current pressure remains manageable compared to the historical peaks in March 2021 and March 2024. These trends indicate that market momentum has temporarily stalled, but the overall market may absorb selling pressure and continue to rise in the medium term.
The overall cryptocurrency market (excluding Bitcoin and Ethereum, referred to as the Total3 index) has also reached a new cycle high, driven by a surge in investor sentiment that propelled the Total3 index to experience a 23.2% rise from low to high last week—its largest increase since April 2021. Large-cap altcoins, such as Solana (SOL), have reached new all-time highs, marking their breakthrough of key resistance levels, including the April 2022 peak.
The market capitalization of altcoins is now close to the $984 billion peak in May 2021, indicating that speculative funds are shifting from Bitcoin to altcoins. Historically, such fund rotations usually herald the arrival of 'altcoin season', where altcoins outperform Bitcoin.
In fact, the annualized financing rate for large-cap altcoins has exceeded the 45% threshold, marking an intensification of speculative activity. With increased participation from retail investors, short-term volatility is expected to rise, further driving the momentum of altcoins. However, these conditions also require caution, as extreme financing rates often indicate severe market corrections.
