As a seasoned researcher with over two decades of experience in the financial markets, I have witnessed many extraordinary events that have reshaped the global economy. However, nothing quite compares to the meteoric rise of Bitcoin crossing the $100,000 mark for the first time ever.
As an analyst, I am thrilled to share that on December 6, 2024, Bitcoin achieved a groundbreaking milestone by soaring above $100,000 for the first time in history. This remarkable surge, amounting to a 32% increase over the past month, occurred amidst a challenging period for traditional assets such as oil, gold, and the S&P 500, which were grappling to maintain their ground.
Despite a 6.3% drop in oil prices, the S&P 500 decreased by 1%, and gold saw a 1% loss, it was Bitcoin that drew global attention as it held steady.
As an analyst, I’m sharing my insights based on the thoughts expressed by Quinten François, co-founder of WeRate. He believes that the recent rally we’ve seen on X marks the beginning of Bitcoin’s “euphoria stage.” He cautions that this phase typically lasts for a maximum of 12 months before reaching the cycle top, which is characterized by heightened investor enthusiasm, a common occurrence in market cycles.
In the world of cryptocurrency, the “euphoria stage” refers to a time when enthusiasm and positive expectations are running high, which usually leads to an increase in prices due to increased buying activity.
François derived support for his prediction from the Net Unrealized Profit/Loss (NUPL) indicator, which reveals whether more Bitcoin owners are realizing a gain or experiencing losses. When NUPL is high, it generally indicates that a significant number of Bitcoin holders are in profit, a situation that typically leads to price increases.
Furthermore, a decrease in liquidity, representing the available funds within economies globally, has posed challenges by impeding growth in various markets. However, Bitcoin remains resilient and performs admirably under these circumstances.
As a crypto investor, I find myself in an exhilarating position as Bitcoin sets new all-time highs amidst a lessening liquidity landscape. Yet, it’s crucial to remember that if the situation deteriorates further, this euphoric rally may have a limited lifespan. On the flip side, should conditions improve, there’s potential for prices to soar even higher.
As a researcher, I’m closely observing the market trends, and I find myself aligning with Raoul Pal’s perspective as the CEO of Global Macro Investor. He anticipates Bitcoin reaching a “local top” of $110,000 by January 2025. This prediction is rooted in the correlation between Bitcoin’s expansion and the global M2 liquidity, or money supply. Essentially, should this liquidity persist in its growth trajectory, we might expect Bitcoin’s price to maintain its upward momentum.
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2024-12-08 00:04