Let’s review the three waves of price increases that Bitcoin has experienced since 2023. At the beginning of 2023, the first wave of increase occurred, which, in my view, was mainly due to the fact that the Federal Reserve's interest rate hikes were nearing their end. The market keenly picked up on this signal and began to lay the groundwork for expectations of rate cuts, leading to the first wave of relatively small price increases in this context.
By October 2023, Bitcoin embarked on its second wave of price increases, primarily driven by the launch of Bitcoin ETFs by traditional financial institutions such as BlackRock. The entry of traditional financial institutions acted like a "shot of adrenaline" for the market, further pushing up the price of Bitcoin.
Fast forward to November 2024, Bitcoin welcomed its third wave of price increases, benefiting from Trump's victory in the U.S. elections. He maintained a supportive stance towards deregulation and was actively encouraging towards cryptocurrencies. Under this favorable policy environment, Bitcoin encountered another opportunity for price surges. It can be said that expectations of rate cuts, the involvement of traditional financial institutions, and support from the U.S. government collectively contributed to these three waves of price increases in the Bitcoin market.
However, it is worth noting that Bitcoin has experienced nearly two years of continuous climbing, and various positive factors have already been fully digested and speculated by the market. In the short term, it may be difficult for Bitcoin to stage another explosive rally.
Now focusing on BTC's market, it is currently facing resistance at the important level of $100,000, and there have been signs of a pullback on the daily chart. Next, we need to pay close attention to the two key support levels of $95,000 and $93,000. If the price drops below these two support levels by the end of the daily close, it would signify the end of this wave of price increases. At that point, both the daily and weekly charts will enter a pullback mode, with short-term target levels likely falling at around $88,500 and $81,600.
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