The wheel of the cycle turns, pushing the market, which was full of fear and hesitation not long ago, into a new stage, and trading suddenly heats up in this mood.
As predicted in our October report “A monthly increase of 10.89%, BTC may hit a new high after the chaos of the US election”: The internal consolidation of the crypto market has been completed, and this month has ushered in an external detonation point – the US presidential election ended on November 6, and the Republican candidate Trump, who was friendly to Crypto, won. The price of BTC continued to hit new highs, approaching $100,000.
The conclusion of this year’s major event has allowed traders in various financial markets to gradually get out of chaos and uncertainty and return to the established trading rhythm, and US stocks have resumed their rise. “Trump’s economic policy” expectations have become the main trading point, and Tesla, MicroStrategy and other stocks have become the targets with the largest increase.
BTC suddenly started to take off amidst the downturn at the end of October, overcoming multiple technical pressures such as the “new high consolidation zone” and the “rising trend line” in one fell swoop, continuously setting new historical highs, reaching a maximum of US$99,860, and recording a sharp increase of 37.42% for the whole month.
As trading heats up, funds saw a huge inflow in November, with a total inflow of US$25.9 billion for the month, making it the largest month of inflow in the history of the Crypto market.
As BTC approaches the $100,000 mark, continued capital inflows have finally triggered a sharp and general rise in Altcoins represented by ETH.
EMC Labs makes a comprehensive and multi-dimensional judgment that the second wave of the “upward period” of the crypto market in this cycle has started, and funds in the market will gradually flow into Altcoins to form a general upward trend.
The high inflation that may be caused by “Trump’s economic policy” and the conflict with the Fed’s ongoing interest rate cut rhythm have become the biggest uncertainty. However, this uncertainty is just a little discordant with the big certainty and is not enough to change the trend of market operation.
Macro Finance: Trump’s Economic Policy
“Trump’s economic policies” mainly include tax cuts and deregulation, protectionist trade policies, energy independence and support for traditional energy, fiscal expansion and debt risks, immigration and labor policies, politics and debt management, etc.
These economic policies guided by the spirit of “America First” will pose a great challenge to the existing global trade and financial order, triggering unpredictable conflicts and chaos. Even within the United States, seemingly irreconcilable contradictions will arise in areas such as economic growth, illegal immigration and the financial system.
Deporting illegal immigrants and raising tariffs may push up inflation, while the federal interest rate is still at a high level, inflation rebounds, and interest rate cuts may be hindered. Without a rate cut, the government’s fiscal expansion will undoubtedly be more difficult, and the high debt scale will make the US government overwhelmed.
The Federal Reserve, which is in the process of cutting interest rates and shrinking its balance sheet, is also facing a dilemma. The US CPI rebounded as expected in November, while employment data and economic conditions remained good, which means that the need for rate cuts has been greatly reduced. Although the dot plot and the minutes of the meeting released by the Federal Reserve show that a 25 basis point rate cut in December is still a high probability event, the rate cut process in 2025 is likely to slow down.
Powell hopes to uphold professionalism, maintain economic stability, and normalize inflation levels. But Trump has made it clear that he will use change and conflict to fulfill his campaign promises – lowering corporate taxes, increasing import tariffs, and providing more domestic jobs. The two’s claims are almost irreconcilable, and their contradictions have become public.
Although there is great uncertainty, traders in various markets have already taken sides and made decisions – going long on the US economy, the most optimistic outcome is “high inflation and high growth.”
In November, Nasdaq, Dow Jones and S&P 500 recorded increases of 6.21%, 7.54% and 5.74% respectively, while RUT2000, which represents small and medium-sized enterprises, recorded an increase of 11.01% and set a record high.
As for U.S. Treasuries, the long-end and short-end yields at the end of the month were 4.177% and 4.160% respectively, both recording a slight decline, indicating that the bearish risk of U.S. Treasuries has temporarily decreased.
The US dollar index continued to rise, closing at 105.74 in November, up 1.02% from the previous month. At the same time, the exchange rates of the euro, renminbi and yen against the US dollar all depreciated. Global funds are optimistic about the US financial market in the future, and the trend of snapping up US dollar-denominated assets continues.
Correspondingly, gold, which carries global safe-haven funds, fell 3.41% this month, recording the largest monthly decline in 14 months. As we gradually move out of the post-epidemic era, liquidity is becoming increasingly abundant, and the risk appetite of global funds is increasing. Equity assets and Crypto represented by BTC are the beneficiaries of this increase.
Crypto assets: BTC hits a new all-time high, Altseason is about to start
In November, BTC opened at $70,198.02 and closed at $96,465.42, an increase of 37.42%, an amplitude of 47.12%, and the trading volume was effectively enlarged.
After returning to the “200-day moving average” and crossing the “downward trend line” in November, BTC continued to achieve landmark breakthroughs in technical indicators this month, breaking through the upper edge of the “new high consolidation zone” that had been stalemate for 8 months, and stepping onto the “upward trend line” again after a lapse of 4 months.
On the monthly line, BTC has achieved three consecutive months of growth and the volume has continued to expand moderately, showing a healthy upward trend.
In previous research reports, we have repeatedly emphasized that more than 30% of BTC addresses have been transferred in the new high consolidation area from March to October this year. This upward repricing has occurred repeatedly in past cycles and has become an internal structural support for future price increases.
The final breakthrough in prices requires the stimulation of external conditions.
The biggest global event in November was Trump’s re-election as US President. His previous enthusiasm for Crypto and his “promises” during the campaign became the emotional catalyst for BTC to break through the “new high consolidation zone” that had been stuck for eight months.
Is the “Trump market” of BTC sustainable? EMC Labs believes that whether it is the “21st Century Financial Innovation and Technology Act” proposed last year, or this year’s “U.S. Bitcoin Strategic Reserve Draft”, or even the “Bitcoin Bill of Rights” just passed by the Pennsylvania House of Representatives, it shows that the United States’ adoption of Crypto has gradually shifted from “permission” to “promotion”. Its goal is to ultimately gain control of encrypted assets represented by BTC and blockchain industries (public chains, infrastructure and decentralized application projects) through laws and regulations and national strategic support, and ensure that the United States gains a dominant advantage in this emerging track.
Therefore, in the next few years, the support from US policies and the adoption of Crypto by traditional institutions including financial institutions and listed companies can be expected to continue to increase. At any time in history, the blockchain industry and encrypted assets have never been so widely accepted and adopted.
Liquidity surges: Two major channels resonate to set a historical record
The continuous inflow of funds is the material support for the bull market.
In November, the BTC Spot ETF and stablecoin channels had a total inflow of $25.9 billion, setting a record for the largest monthly inflow on record. The ETF channel had $5.4 billion and the stablecoin channel had $19.5 billion. In November, the scale of ETF fund inflows exceeded that of February, making it the largest inflow month.
Since October, as the US election draws to a close, the ETF channel funds have been launched first. Since September, the inflow of funds in this channel has gradually increased, with 1.2 billion, 5.4 billion and 6.4 billion inflows from September to November respectively. We have previously emphasized that the funds in the ETF channel have independent will and will gradually control the price trend of BTC. This has been fully reflected in the recent market.
Compared with the “big brother” who bravely took on the heavy responsibility, the stablecoin channel funds were a little late. After entering November, with the continuous breakthrough of BTC prices, it began to show a trend of large-scale inflow. However, the inflow of stablecoin channel funds reached 19.5 billion US dollars throughout the month, far exceeding the ETF channel funds.
On November 22, when BTC hit the $100,000 mark, funds on the market began to start ETH, and the increase on that day reached 9.31%. In November, ETH’s cumulative increase reached 47.05%, exceeding BTC, and the market seemed to be opening Altseason.
EMC Labs believes that after BTC breaks through the $100,000 mark in the future, Altseason will gradually open. After Altseason opens, the market will gradually show: 1. ETH breaks through the historical high; 2. The market generally rises; 3. The main market trend is gradually identified.
Long-short game: Liquidity triggers a second wave of selling
The cycle is a game of collecting and distributing chips between long and short hands in time and space.
Long holders collect chips during the decline, bottoming out and repair periods, and continue to sell during the rise and transition periods until liquidity can no longer absorb the selling pressure and the market reverses.
In this cycle, long-term investors launched the first large-scale sell-off since January 2024, and then returned to the accumulation state after the market entered a consolidation in March. In November, as liquidity recovered and prices hit new highs, long-term investors have started the second round of sell-offs, which is also the last large-scale sell-off in this cycle.
As of the end of September, long-term positions were 14.22 million coins, and by the end of November, the scale of selling positions reached 13.69 million coins, and the “selling scale” in two months reached 530,000 coins.
During the rising phase, the motivation for long-term selling is the price increase brought about by liquidity, and the price increase is also a self-proving process of the market, which will trigger more capital inflows.
The secondary selling by long holders has just lasted for two months, and with the continued increase in liquidity, it is expected to continue in the first half of 2025.
Conclusion
In November, the cycle once again demonstrated its strong market regulation capabilities.
EMC Labs believes that the fundamental reason for the rise in the price of BTC and the entire crypto market is that, on the basis of the complete internal structure, the continued interest rate cuts in major economies around the world and the significant increase in investors’ risk appetite are the fundamental reasons. In addition, the significant increase in adoption and the expectations of US national policies also provide great emotional and material motivation.
We believe that these external factors will continue to provide momentum for the crypto market in the coming year. Therefore, the crypto bull market will continue to rise after the restart, and there will still be twists and turns in the middle, but the second half of the rising period is destined to provide more generous returns for long-term investors.