BTC skyrocketed from over $68,000 on November 4th to $80,000!
Why such a surge after an election? BTC, ETH, and altcoins are all rising sharply; is there a risk of a major correction in the future?
Can we increase our positions with this continuous upward trend? How should we do it?

Today, let's analyze this together with Ctalks. It's important to note that not only did the much-anticipated U.S. elections conclude this week, but the Federal Reserve also announced interest rate cuts in their latest meeting, and major financial market giants have just released their earnings reports. At this critical moment, all market performances are not coincidental; there is a clear investment logic behind it. Only by grasping this logic can we keep pace with the development rhythm in the future cryptocurrency market.

Why does cryptocurrency experience such a sharp rise after the election? Is such an increase really justified?

With the end of the election and the uncertainty lifted, traditional stock markets have entered a bullish phase, and cryptocurrencies have surged accordingly, which is actually not surprising. So, after such a significant rise in a week, can this momentum continue? Is there a risk of a major correction?

Let's look for some answers in history. After Trump was elected in 2016, the cryptocurrency market experienced a rapid rise similar to today. Notably, this upward trend did not completely end after the first-week surge but continued into 2017. We can also refer to the volatility of the U.S. stock market; historically, post-election volatility declines tend to last for a long time, while current volatility remains at a relatively high level. Based on historical experience, there is still room for further declines in short-term volatility, which aligns with the trends in the cryptocurrency market.

Now let's discuss our analysis: exploring the current trends and potential sustainability of the cryptocurrency market from historical data, market sentiment, and technical analysis.

Historical performance and market sentiment

- Historical performance: Historical data shows that in similar political and economic environments, financial assets (including cryptocurrencies) tend to show a certain upward trend after significant events. For example, after Trump was elected in 2016, both the U.S. stock market and the cryptocurrency market experienced a period of growth.

- Market sentiment: The current market sentiment is relatively rational, and the fear and greed index shows only a slight rebound in market sentiment, which has not reached an irrational level. Furthermore, the performance of companies during earnings season indicates that the market is very stringent on corporate profits, further proving that market sentiment is not overly optimistic.

Technical analysis and capital flow

- Technical analysis: From a technical chart perspective, Bitcoin and other major cryptocurrencies remain strong, with breakthroughs at key support and resistance levels providing further momentum for market growth.

- Capital flow: The level of institutional investor participation remains low, and the leverage of hedge funds has gradually increased post-election. These factors indicate that the market may continue to receive capital support in the near future.

Risk factors

- Short-term risks: Although market sentiment is relatively rational, there are still some uncertainties in the short term, such as policy changes and fluctuations in macroeconomic data. These factors may cause short-term market volatility.

- Long-term risks: In the long run, the sustainability of the cryptocurrency market depends on the recovery of the global economy, changes in regulatory policies, and advancements in technological innovation.

Investment strategies

- Buy on dips: When the market experiences a pullback, consider gradually increasing positions, especially when market sentiment is relatively rational.

- Regular investments: By making regular investments, one can smooth out market volatility and reduce the risk of entering at a single point in time.

- Stay cautious: Although the current market is performing well, it is essential to closely monitor economic data and policy trends to avoid losses from unexpected black swan events.

Conclusion

Based on the above analysis, we believe that the current upward trend in the cryptocurrency market is justified and has a certain degree of sustainability in the short term. However, investors should remain vigilant and pay attention to changes in market sentiment and technical indicators to adjust their investment strategies timely. Understanding the logic behind the analysis is more important than simply relying on conclusions, as it helps make wiser decisions in future market fluctuations.

I hope this analysis can provide you with valuable insights. Please note that the above content is for analytical purposes only and does not constitute specific investment advice.