In the past week, BTC has continued to rise, successively breaking through $96,000, $97,000, $98,000, and $99,000 ATH. The market's attention on BTC has returned to its peak, eagerly awaiting BTC to break $100,000. Not only has the BTC Google search index skyrocketed, but Microstrategy has also exercised its over-allotment option on its convertible bonds, with its MSTR maturing in 2029 closing above $104 on its first trading day.
On the 23rd, after BTC broke through the ATH of $99,588, the market struggled to maintain its upward momentum and fell to around $95,734. Although it rebounded slightly back to around $98,000, BTC entered a downward channel on the night of the 25th, reaching a low of $92,326.31, with a maximum drop of 6.5% within 24 hours. The current BTC price fluctuates around $93,000 (the above data is sourced from Binance spot as of November 26, 17:00).
Although BTC has experienced its largest correction in nearly half a month, the crypto market has not reacted as violently as before. Not only did ETH not follow the decline, but most altcoins did not enter a crash, with some even showing slight gains. With Trump about to take office, BTC investors' profit-taking on-site, and the complex leverage effects, BTC's volatility may further increase in the future.
BTC technical indicators have entered a short-term overbought phase, with some long-term holders taking profits.
Since Trump's victory, BTC technical indicators have shown severe overbought conditions. Moreover, prior to this week, BTC was the only investment target in Trump's economy that had not experienced profit-taking, and as FOMO sentiment among the public intensifies, many long-term holders have chosen to take profits. Crypto Banter analyst Kyledoops pointed out that long-term BTC holders have sold 128,000 BTC, although BTC ETFs absorbed 90% of the selling pressure during the same period.
Market FOMO sentiment is excessively high, and BTC price pullbacks may be beneficial for future development.
Microstrategy exercised its over-allotment option of $400 million based on $2.6 billion in convertible bonds (0% coupon, 55% premium), raising the final size to $3 billion. This batch of convertible bonds maturing in 2029 closed above $104 on its first trading day.
At the same time, the market quickly launched Microstrategy's leveraged ETFs (MSTX, MSTU), giving retail investors more 'suboptimal' ways to leverage trade BTC spot. According to Bloomberg reports, the high demand for these leveraged ETFs has put pressure on the main brokers responsible for securities lending, with related asset management scales surging to nearly $5 billion in the past week.
Public opinion continues to elevate BTC's visibility, with a well-known television commentator suddenly reversing their stance to support cryptocurrencies and suggesting that investors hold BTC at high points. Market FOMO further exacerbates recent market bubbles, leading to a significant increase in leverage at current levels and causing actual volatility to rise sharply.
Macroeconomic Interpretation
Strong U.S. economic indicators increase the possibility of a soft economic landing.
Data shows that over $448 billion has flowed into the U.S. stock market this year, breaking the record set in 2021 and reaching unprecedented levels. At the same time, Nvidia's earnings report exceeded expectations, and U.S. stocks remain strong. Economic indicators have rebounded to strong first-quarter levels, while inflation data has not yet broken upward. The high-income consumer index has reached a record high, and the U.S. (high-income) group's purchasing power remains strong. Data suggests that the possibility of a soft economic landing in the U.S. has increased.
The Lebanon-Israel conflict may be nearing an end, leading risk-averse funds to withdraw.
The Lebanon-Israel conflict is nearing an end, leading risk-averse funds to withdraw. Besides the cryptocurrency market, the overnight gold, oil, and other commodity markets also saw significant declines. As of the close of the night session on November 25, spot gold in London, spot silver in London, COMEX gold, and COMEX silver all fell over 3%.
According to CCTV news, on November 25 local time, U.S. State Department spokesperson Matthew Miller mentioned the Lebanon-Israel ceasefire agreement during a briefing, stating that the ceasefire agreement 'has not yet been reached.' The U.S. believes the gap in differing opinions between the negotiating parties has 'significantly narrowed,' but some measures still need to be taken to facilitate its conclusion. The U.S. is pushing negotiations 'as much as possible.'
On the 25th local time, Lebanon's MTV television station reported exclusively that Lebanon has received a ceasefire notification from Israel and will announce it tomorrow night. According to the Israel Times, Israel has in principle agreed to reach a ceasefire agreement with Hezbollah with U.S. support.
Trump's tariff remarks caused a massive shock in the foreign exchange market.
On the 25th local time, Trump stated that a 25% tariff would be imposed on all products entering the U.S. from Mexico and Canada. Following the announcement, the currencies of Canada and Mexico fell over 1% against the dollar, intensifying volatility in the foreign exchange market, which has daily trading volumes as high as $7.5 trillion, with emerging market currencies generally weakening. Commodity currencies like the Australian dollar and New Zealand dollar also declined. The Asia-Pacific market's stock market was similarly under pressure, with a widespread decline.
Market Recommendations
The current market FOMO remains, and investors are advised to maintain rationality in the absence of significant relief from overbought conditions. Ensure robust risk control while properly allocating assets to capture returns while further avoiding risks. Additionally, given Trump's past use of social media to convey unfiltered thoughts and policy intentions, the market is likely to be filled with speculation and conflicting trading ideas, making it very important to maintain flexibility in asset allocation.
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