Source: Huali Huawai
With Trump winning the US election the day before yesterday, today (November 8), the Fed cut the benchmark interest rate by 25 basis points to 4.50%-4.75% (the second rate cut this year, in line with market expectations), market sentiment continues to rise, and Bitcoin has continuously broken historical highs reaching $76,990.
Although the result of the US election will have a long-term impact on the crypto market, we should not ignore the short-term volatility risks. In this week's fluctuating rise of Bitcoin, in just the past 24 hours, the total liquidation amount in the crypto market exceeded $348 million, with over 96,000 people liquidated. Meanwhile, the open interest amount 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 try to stay away from leverage.
In our previous article (November 5), we mentioned that the crypto market has never lacked hot topics. Almost every so often, new significant events become the focus of everyone's attention and discussion. Now, with the upcoming US election in November and the expectation of the Fed's second rate cut, people are likely to start looking for or focusing on the next new event soon.
From a short-term perspective: Currently, the reason why Bitcoin's price can break through the historical high is mainly due to the emotional impact of Trump's victory in the US election, which we have elaborated on in previous articles. At this stage, the leverage ratio in the crypto market has significantly increased, so we cannot rule out the possibility of a short-term adjustment.
From a medium to long-term perspective: As we envisioned in previous articles, with the breakthrough of Bitcoin, a new round of bull market has arrived. Although some adjustments may be faced in the short term, this is normal, as the market cannot rise straight up; there will always be some adjustments. However, if you are still holding back at this stage, still thinking of waiting to buy Bitcoin below $40,000, then 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 on this issue since our articles started in 2022. Although personally, I am reluctant to talk too much about any market predictions or price forecasts, as a blogger, I know that many people (especially newcomers) enjoy reading such content, so I will occasionally do market analysis or price predictions (guesses).
As for the price of Bitcoin, for example, in the article on February 14, 2024, we made some simple thoughts on the market trend from four different dimensions. At that time, we further made a subjective prediction on the price of BTC, leaning towards the range of $100,000–$120,000, and this range will also be where I start considering selling in batches. As shown in the figure below.
Of course, we still adhere to the old saying: the market is unpredictable, and all so-called predictions are merely guesses made by different people based on historical experiences, data, etc. The logical point here should not be to look at what others say, as everyone's risk preferences, position situations, personal experiences, etc., are all different; you should make reasonable plans and strategies based on your own circumstances.
Currently, our personal expectation (guess) for Bitcoin to reach $100,000–$120,000 in this cycle remains unchanged, but with Trump's victory causing Bitcoin's price to rapidly break through historical highs, combined with the possibility of Trump (additionally, over 270 candidates supporting cryptocurrency won congressional seats this week) implementing new positive measures for the crypto market (such as making BTC a strategic reserve asset for the US) and the Fed's ongoing rate cut expectations, we even believe Bitcoin may reach as high as $150,000 next year (2025).
So, how high can Ethereum's price reach in this bull market?
As mentioned above, if Bitcoin can indeed rise to over $150,000 next year, then optimistically guessing, ETH has a great chance of reaching $12,000, SOL may also exceed $450, and some altcoins theoretically could have a 5–10 times potential. If we speculate based on our previous prediction of Bitcoin in the $100,000–$120,000 range, then ETH's potential price would be $8,000–$10,000, and SOL's potential 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:
- Coinbase stock rise
With Trump's victory, suppressed demand seems to have been quite evident, although traditional off-market funds may not consider directly participating in the crypto market for some reasons, the recent rise in Coinbase stock can also illustrate some issues. As shown in the figure below.
In addition to the performance of Coinbase stock, another point we need to consider is that Coinbase (including the Base chain) and its derivatives (such as staking, DeFi) are fundamentally closely linked to Ethereum. Therefore, from a price expectation perspective, although ETH's price is currently 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 ETF products aside from BTC. At this stage, Bitcoin is continuously setting historical highs, and Solana also broke its historical high today (November 8), while ETH is also worth our continued expectation.
- CEX is experiencing a large inflow of stablecoins.
The day after the US election, the stablecoin inflow to exchanges such as Binance and Coinbase reached a cumulative total of $9.3 billion, marking the second largest inflow of ERC-20 stablecoins since their inception. Generally speaking, this is a very positive signal, as a significant portion of this capital may be used to purchase BTC or altcoins. As shown in the figure below.
Moreover, historically, the massive inflows of funds from September 2020 to February 2021 and the subsequent upward trend occurred simultaneously with the bull market rebound. If history can repeat itself, then the current large influx may similarly trigger a similar upward trend, and the crypto market may experience another bullish rebound.
Additionally, it must be mentioned again about the MemeCoin issue. In our previous article, we already pointed out that it seems that the trend of MemeCoin is also at a phase peak, and we may soon see the possibility of some altcoin narratives rapidly rotating.
As Bitcoin continues to break historical highs this week, I have observed 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, many altcoins other than BTC seemed to be considered securities, which prevented many altcoins from being used for normal speculation in the US market. However, with Trump's inauguration, perhaps these issues may have some new changes.
We expect that before the first or second quarter of 2025, some altcoins may be re-focused and speculated upon, and then some liquidity in MemeCoin may quickly flow back to altcoin narratives. However, during this process, due to the particularity of this cycle's MemeCoin narrative, we may continuously see stories of a few Memes getting rich (i.e., a small number of MemeCoins will continue to rise), but the probability of a large-scale MemeCoin cycle surge will significantly decrease.
In summary, from a medium to long-term perspective, we remain optimistic about the overall development of the market. Regardless, we firmly believe that Bitcoin will eventually reach above $100,000. But you should also pay attention to short-term fluctuations. This week or in the coming weeks, as the election and rate cut expectations are realized, the market may experience sideways consolidation or short-term declines.
It seems that everyone can make money in a bull market, but many people often lose money in the later stages of the bull market. It is important to have your own plan and position management; if it is a short-term operation, pay attention to setting stop-loss and take-profit. If you are still holding back and observing, and you want to seize the last opportunity of this bull market, then you need to seriously think and adjust your strategy, as bull markets will not last forever.
