Today, cryptocurrency prices reflect bullish momentum as Bitcoin (BTC) reached a historic high of $106,000. Major altcoins like Ethereum (ETH), XRP, and Solana (SOL) have also seen increases in the past 24 hours. Fantom (FTM) became the coin with the largest gain at 17%, followed by Stacks (STX) with a 15% increase.
Global market capitalization rose by about 3%, reaching $3.74 trillion, with trading volume increasing by 20% to $147 billion. The Fear and Greed Index shows a value of 80, indicating extreme greed in the market, further highlighting today's positive sentiment in cryptocurrency prices.
Bitcoin sets a new high
On December 16, Bitcoin welcomed a remarkable highlight moment, with its price soaring and daily gains continually expanding. According to various sources, Bitcoin's daily increase expanded to different degrees; for example, AI news mentioned that Bitcoin's daily increase rose to 3.5%, reaching $106,300, setting a new historical high.
Factors driving the rise
Support from the policy level
The attitude of the elected U.S. President Trump towards Bitcoin and related policy measures has had a significant impact on Bitcoin's price trends.
Moreover, many cabinet members that Trump plans to nominate after the election are also Bitcoin 'enthusiasts'. The market expects that the Trump administration will implement more supportive policies for cryptocurrencies, which has become an important driving force for Bitcoin's significant price increase.
Support for capital inflows
The massive inflow of capital has played a critical supporting role in Bitcoin's price increase. The Bitcoin ETF (IBIT) from BlackRock has demonstrated strong capital-absorbing capabilities, attracting a lot of funds.
Institutional investors and traditional financial market funds are also entering the market. Many large investment companies are starting to invest in Bitcoin-related assets, and the influx of more funds has raised Bitcoin's price.
Market sentiment and speculation impact
Market sentiment's impact on Bitcoin price trends cannot be underestimated. When Bitcoin's market is doing well, investors often tend to follow the trend and buy in, driven by the psychology of 'fear of missing out', leading a large number of investors to flood into the market, further intensifying the upward price trend. Conversely, once negative news or volatility occurs in the market, panic selling may follow, causing prices to drop rapidly.
Endorsement of technological development
The blockchain technology behind Bitcoin is continuously expanding its applications across multiple fields, providing strong support for Bitcoin's value. Initially, the application scenarios of blockchain technology were digital currencies like Bitcoin; today, it has been widely applied in finance, supply chain management, healthcare, copyright protection, and many other areas.
The current market situation is judged as follows:
1. The first phase of the bull market has ended, and after the adjustment, it is about to enter the second phase.
2. Currently, off-market funds have not yet entered on a large scale and are still in the self-entertainment stage within the market. The rise of many coins is also driven by leverage within the market, so it is necessary to clear leverage in the short term.
3. The adjustment period will not be long, and the second phase will begin before Christmas.
4. The leading coins in the second phase are either SOL or ETH, based on my experience with several chains. SOL is simple, has a low threshold, and has a crowd base, while ETH has a need for catch-up growth.
5. The leverage clearing (pin insertion) in the second phase will be even more intense than in the first phase, but the overall direction of the rise remains unchanged, so it is sufficient to accumulate spot at dips.
Capital flow in the altcoin season
The rise of altcoins = Bitcoin breakthrough × Ethereum trend.
Bitcoin drives the overall market, while Ethereum amplifies market risk appetite. A breakout in Ethereum is the real signal for the start of the altcoin season: 1. Ethereum's rise drives mainstream assets to strengthen; 2. After mainstream assets rise, funds gradually flow into high-risk altcoins.
This forms a clear transmission chain: Bitcoin → Ethereum → large-cap coins → mid and small-cap coins → various altcoins begin to rise crazily → bull market ends, entering a long bear market.
The start of altcoin season usually begins with the rise of some innovative projects, such as:
Some emerging projects: such as SUI;
Some MEME coins and air coins: such as PNUT, PEPE, VIRTUAL;
Some undervalued old-school altcoins: such as XRP, XLM, TRX, OM, etc.
With the crazy rise of altcoins, the market will enter a state of extreme enthusiasm, which can also be seen as a warning signal, indicating that a market reversal may occur.
