In recent times, the surge in BTC has positioned the market very favorably to move towards greater heights. Bitcoin halving is not the key catalyst for a bull market — it just happens to coincide with BTC's periodic rise.
The market is driven by momentum, which is vividly reflected in BTC and other cryptocurrencies.
Each historical high of BTC coincides with the 'monthly RSI indicator breaking 70'. In previous bull markets, the market often exhausted its momentum only after this indicator broke 90.
If this historical pattern repeats, BTC must rise to about $175,000 in this cycle to reach the corresponding RSI level (if it really starts to surge, it could even reach $190,000-$200,000). This prediction is based on the assumption that the peak of the current cycle will see a period of accelerated rise, similar to most previous cycles.
In terms of volatility, BTC's current volatility is also far below the '1-2 standard deviations' that typically indicate a cyclical peak.
In such a rapidly developing industry, it's hard to see the forest for the trees. We all know that volatility is a double-edged sword, which is why the time span is important.
If more proof is needed, here’s an interesting fact: Even if you bought BTC at the cyclical peak in November 2021, if you held on, its performance would still outperform all other major asset classes to this day.
Bitcoin breaking historical highs is not just an attractive headline; for the cryptocurrency market, it is the ultimate driver of 'risk appetite'.
"Price is the ultimate driver of attention, capital flow, and on-chain activity."
In the last cycle, retail investors only flooded in after Bitcoin's price had thoroughly broken previous highs. This trend can be seen from the surge in Google search volume and news coverage of 'Bitcoin', as well as the increase in retail trading revenue on Coinbase. Investor confidence and risk appetite often rise when Bitcoin 'takes off' and breaks previous highs.
Price drives increased attention, thereby accelerating FOMO and the inflow of funds.
The liquidity trend of BTC ETFs this year clearly illustrates this trend.
The iShares Bitcoin Trust ETF (IBIT) ranks third in inflows among all ETFs this year, surpassed only by two of the largest S&P 500 ETFs, whose total assets under management are 20 times that of IBIT (approximately $1.1 trillion).
Price is the ultimate driver, and compared to traditional asset classes, Bitcoin has topped the asset growth chart for two consecutive years.
BTC has not only reached a new high against the dollar but also a new high against the NDX (Nasdaq 100 Index), which itself has risen nearly 30% this year.
BTC has also reached a new high against SPX (S&P 500 index)... while SPX is expected to deliver its best performance in the past thirty years this year.
Compared to gold, BTC has also reached a new high.
Mocking Bitcoin is no longer a cool thing to do. This cycle will solidify BTC's position as a macro asset that can no longer be ignored.
BTC's current market cap is about $2 trillion.
This is a significant number. If Bitcoin were a publicly traded company, BTC would be the sixth most valuable asset in the world.
Bitcoin has now grown large enough to attract the attention it deserves, but it is not so large that it lacks sufficient room for growth.
BTC and the cryptocurrency market still have a substantial pool of deep funds available. When people are confident about a rally in the cryptocurrency market, all of this will turn into potential demand.
With the Federal Reserve and other central banks pushing their currencies to depreciate by 5-7% annually, investors need to achieve a return of 10-15% per year to hedge against the loss of real purchasing power.
This is why investors' attention is increasingly turning to high-growth industries, as they are the best places to seek above-average returns.
As the accumulation of positive factors continues to outweigh potential negatives, investors will be more willing to take on some risk in pursuit of higher returns.
