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Bitcoin Schrödinger: Bitcoin Valuation #Bitcoin

Bitcoin Schrödinger's model estimates a fair price of $192,838, higher than the current price of $103,901, suggesting a potential 2x appreciation. The resulting market cap from the model is $4.050 trillion, compared to the current $2.182 trillion. The projection shows the monetization path over 30 years, with an estimated final value of $1,236,810 trillion

The chart below details the contributions of traditional assets such as stocks, bonds, gold, real estate, and others to the value of Bitcoin, highlighting the inclusion of the "demonetization" of these assets as a key factor in the long-term increase in the price of Bitcoin

$BTC #BTC

$BTC You thought you already knew all the indicators of #Bitcoin , didn't you?! You thought wrong!

Google Trends is a tool that reveals global interest in various search terms on Google and YouTube. Since these platforms are the largest in the world, analyzing what people are searching for can provide important insights into market trends

In the case of Bitcoin, there is an interesting correlation between price spikes and increases in searches for the term 'Bitcoin'. Historically, market tops in 2013, 2017 and 2021 coincided with peaks in interest on Google, indicating a correlation #BTC

This relationship is logical and understandable! As the price of Bitcoin increases, so does curiosity and desire to invest, leading more people to search for information online. Currently, we are far from a new peak in searches, suggesting that we have not yet reached the next all-time high. While it is uncertain whether we will surpass the 2017 record, it is likely that we will surpass the 2021 record

This indicator, although simple, offers an interesting perspective on market dynamics and can help predict future movements, don't you think? Did you find it interesting?

$BTC Since the beginning of November, Bitcoin has repeatedly reached new all-time highs 'ATH' throughout the month, beginning a bullish phase similar to previous cycles, suggesting the price could rise beyond $100K. When comparing the price performance of the current cycle with the 2015-2018 and 2018-2022 cycles, a similarity is observed in both the magnitude of the rally and the duration, surprisingly consistent despite significantly different market conditions. Historically, past bull markets have spanned periods between 4 and 11 months from the current point, providing a historical framework for evaluating cycle length and momentum

#BTC The short-term SOPR (Spent Output Profit Ratio) metric is an essential tool for tracking the behavior of Bitcoin holders who have held coins for a period between 1 and 155 days. This indicator measures the relationship between the selling price and the buying price of coins, allowing to identify whether investors are taking profits or losses. On November 21, the short-term SOPR reached 1.096, indicating that short-term holders were selling their coins at a profit. This behavior is common during bullish market moments, when investors look to take advantage of recent gains. Historically, the short-term SOPR has also been a useful metric for identifying potential reversal points in the market.

When short-term holders start selling their coins at a loss (SOPR below 1), it usually signals a moment of capitulation, which can indicate the end of a downtrend. Significant corrections that push these investors into negative territory often create attractive buying opportunities for more strategic investors who closely monitor the behavior of this metric. These “sell at a loss” moments tend to reduce selling pressure and pave the way for a market recovery, especially when accompanied by an increase in interest from long-term or institutional buyers, as we are currently experiencing.

$BTC could face a correction of 10% to 15% (between $87k and $84k) according to analyses that point to a correlation between the price of the cryptocurrency and the global M2 index, which measures the supply of money in circulation in the economy. This relationship has an average lag of 70 days (10-week theory), which means that fluctuations in M2 tend to impact the price of Bitcoin after this period. Since September 2023, Bitcoin has closely followed the variations in M2, and, with the index going through a period of deflation in the last two months, the price of the cryptocurrency could reflect this trend with a correction of between 20% and 25%

This movement would be a natural response to the reduction in global liquidity, reinforcing Bitcoin's sensitivity to money market conditions; Although Bitcoin has shown moments of decoupling from the global financial market, such as between 2022 and 2023 due to specific events such as the collapse of FTX and the drop in interest in digital assets, structural factors can help mitigate potential declines. The launch of Bitcoin ETFs, increased buying pressure from large corporations and greater institutional adoption are elements that can support the price of the cryptocurrency, even in the face of a reduction in global liquidity.

$BTC We closed the month of November with an appreciation of +37.29%, going down in history as one of the best months for Bitcoin in the entire year, and the month with the highest absolute price appreciation; rising from $70,202 at the beginning of the month and reaching highs close to $100k, closing at $96,441. This performance surpasses not only the gains accumulated in recent months, but also marks one of the largest monthly advances in the recent history of the asset

The strong rise was driven by a combination of factors, including the American elections, the increase in institutional confidence, the entry of new investors into the market and optimistic projections that point to an even more promising future. Since the low of $38,505 recorded in January, Bitcoin has already accumulated an appreciation of more than 150%, consolidating itself as the best performing asset in the global financial market of all time, for the second consecutive year. Additionally, the asset reached a market capitalization of over $1.9 trillion, an achievement of over $1 trillion in market cap by 2024.

According to onchain data, the breakout of the $BTC price above $89.5k reflects significant profit-taking dynamics in the market. This breakthrough indicates that investors are holding onto statistically significant unrealized profits, which increases the potential for profit-taking activity. However, history shows that markets in “overheated” states can sustain this behavior for prolonged periods, especially when there are substantial capital inflows capable of absorbing the selling pressure.

Despite some metrics suggesting an increased risk of profit-taking, robust liquidity in the cryptocurrency market could continue to sustain positive momentum, bolstering investor confidence and creating an environment conducive to sustained bullishness. The euphoric sentiment in the Bitcoin market is evident, with the Fear and Greed Index pointing to “extreme greed,” indicating growing investor confidence and strong demand for the cryptocurrency. This scenario is similar to what was seen during the last major bull run, where prolonged periods of extreme greed drove the price to new highs. However, there are also risks, as the market is notoriously volatile and tends to react abruptly to overly optimistic sentiment, and although the current situation suggests the possibility of new price peaks, we must be alert to potential corrections, which may arise as a natural response to an overly optimistic market.

If liquidity continues to decline due to a strong dollar or tight monetary policies, Bitcoin’s price could face downward pressure in the coming weeks. On the other hand, a recovery in global liquidity could boost the asset’s price after the lag period, reinforcing the importance of monitoring these macroeconomic indicators $BTC

$BTC could fall further!

There is a strong correlation between the price of Bitcoin and global liquidity, and Bitcoin tends to react to liquidity movements with a lag of approximately 10 weeks. Since the end of September, global liquidity has been declining, driven by the significant appreciation of the US dollar, which reduces the liquidity available in global markets. This decline negatively impacts risk assets, such as Bitcoin, which rely on speculative capital flows to support their price

The market response to the Fed’s first rate cut was atypical, with 10-year Treasury yields rising from 3.66% to 4.42% (+76 bp) instead of falling. This reflects investors’ cautious view of monetary policy and inflation, indicating that while inflation appears to be under control in the near term, persistent inflationary forces remain a challenge, making a return to looser monetary policies more difficult.

Typically, interest rate cuts reduce long-term bond yields as investors expect a weaker economy and controlled inflation. However, this time, yields rose, reflecting expectations of more persistent inflation, a resilient economy and the perception that the Fed will not quickly return to easy monetary policies. This indicates less market confidence that rate cuts will alleviate economic and inflationary pressures in the near term.

FED interest rate cut? Will it?

According to CME analysts, the chance of the FED cutting interest rates by 0.25 bps is 56.2% at its next meeting on December 18. During his speech in Dallas, Texas, on November 14, FED Chairman Jerome Powell stated that “the economy is not sending any signals that we need to rush to cut rates,” following recent cuts of 50 and 25 basis points (bp) in September and November. This statement suggests a cautious stance by the FED, keeping interest rates steady while assessing the current economic strength, which directly impacts risk assets such as Bitcoin.

$BTC If you’re wondering how low Bitcoin can fall to make substantial new DCA inflows, let me help you out with some statistics. The drawdowns suffered during the recent price surge are relatively modest compared to previous cycles. Historically, Bitcoin has experienced significant drawdowns after reaching bullish peaks, such as the -49.4% in the 2011 cycle, -71.2% between 2011 and 2013, -36% from 2015 to 2017, and -62.6% from 2018 to 2021

In contrast, the current cycle, which began in 2022, has seen a drawdown of only -26% from recent highs. These numbers indicate that despite the fluctuations and challenges faced, the current bull market has been less volatile and more resilient than previous cycles. Buyer demand has been remarkably robust, supporting the overall bullish trend structure, and this resilience suggests that despite headwinds such as global economic uncertainty and specific cryptocurrency market events, investor confidence in Bitcoin’s long-term potential remains strong. The market’s ability to withstand less severe declines and maintain continued investor interest highlights a growing maturity in market participant behavior, signaling a solid foundation for future growth.

$BTC While profit-taking is substantial, it has remained below all-time highs, suggesting further room for further gains before potential demand exhaustion is reached. Sell orders are particularly high around $93k and $95k, suggesting that many traders are willing to take profits at these levels, but despite the market tensions, Bitcoin has been rallying above the $80k mark, driven by ‘FOMO’ and large buy orders between $88k and $85k.

However, large players or ‘whales’ are taking advantage of this elevated price to sell their positions, as evidenced by the substantial sell volumes. The gaps in buy orders indicate that a liquidity squeeze may occur, potentially resulting in more extreme price movements as supply adjusts to demand. This suggests that while the market is bullish, there is caution among large investors about the sustainability of this rally

Investigation: Gensler Violated the Civil Service Reform Act

Hours after the election of Donald J. Trump as president, Gary Gensler, chairman of the Securities and Exchange Commission (SEC), faces an investigation over allegations of ideological bias in his appointments to senior positions within the agency

The investigation, led by Congressional committees, seeks to assess whether Gensler violated the Civil Service Reform Act by favoring individuals from left-leaning organizations, thereby compromising the impartiality of the SEC. This action arises amid concerns about the influence of political affiliations on the agency's staffing decisions, highlighting the importance of oversight to ensure compliance with federal legislation

Investigation: Gensler violated the Civil Service Reform Act

Hours after Donald J. Trump was elected president, Gary Gensler, chairman of the Securities and Exchange Commission (SEC), faces an investigation into allegations of ideological bias in his appointments to senior positions at the agency

The investigation, led by congressional committees, seeks to assess whether Gensler violated the Civil Service Reform Act by favoring individuals from left-leaning organizations, compromising the impartiality of the SEC. The action comes amid concerns about the influence of political affiliations on the agency’s personnel decisions, highlighting the importance of oversight to ensure compliance with federal law

The US electoral map shows Trump leading with 292 electoral votes to Harris’ 224, well above the 270 needed. Trump has 72,828,339 popular votes, while Harris has 67,843,270. The map displays red and blue arrows, indicating margin changes since 2020

The predominance of red arrows suggests an increase in support for Trump in several regions, while blue arrows show gains for Harris. This visualization reveals the electoral dynamics and significant changes in political support in different areas

The U.S. electoral map shows Trump leading with 292 electoral votes against Harris's 224, surpassing the necessary 270. Trump has 72,828,339 popular votes, while Harris has 67,843,270. The map displays red and blue arrows, indicating margin shifts since 2020

The predominance of red arrows suggests increased support for Trump in several regions, while blue arrows show gains for Harris. This visualization reveals electoral dynamics and significant changes in political support across different areas

Haverá apenas mais um corte na taxa de juros este ano, alerta o CEO da BlackRock, Larry Fink, que acredita que os mercados podem acabar decepcionados
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There will be only one more interest rate cut this year, warns BlackRock CEO Larry Fink, who believes the markets might end up disappointed

$BTC Analyzing the annualized basis of Bitcoin futures on a three-month rolling basis, highlighting the evolution of yields over time, we see that on October 22, 2024, the annualized basis reached 9.6%, indicating a significant opportunity for 'cash-and-carry' strategies. This strategy involves buying the asset in the spot market and simultaneously selling it in the futures market, capitalizing on the price difference. With yields almost double that of short-term US Treasuries, this strategy becomes attractive, especially in a scenario where rate cuts by the FED are expected. This could further drive institutional participation, increasing the liquidity and efficiency of the Bitcoin market. As the returns from cash-and-carry strategies outperform those of traditional financial instruments such as Treasuries, Bitcoin positions itself as a viable and profitable alternative for institutional investors; and this trend not only increases market liquidity but also reinforces the legitimacy of Bitcoin as a financial asset

$BTC Analyzing the annualized basis of Bitcoin futures on a three-month rolling basis, highlighting the evolution of returns over time, we see that on October 22, 2024, the annualized basis reached 9.6%, indicating a significant opportunity for cash-and-carry strategies. This strategy involves buying the asset in the spot market and simultaneously selling it in the futures market, capitalizing on the price difference. With yields almost double those of short-term U.S. Treasury bonds, this strategy becomes attractive, especially in a scenario where Fed rate cuts are expected. This could further boost institutional participation, increasing the liquidity and efficiency of the Bitcoin market. As the returns from cash-and-carry strategies surpass those of traditional financial instruments like Treasury bonds, Bitcoin positions itself as a viable and profitable alternative for institutional investors; and this trend not only increases market liquidity but also reinforces the legitimacy of Bitcoin as a financial asset