EMC Labs November Report: BTC Approaching $100,000, Surging Liquidity Restarting the Cryptocurrency Bull Market

Author: 0xWeilan

The cycle giant wheel is rotating, pushing the market that was filled with fear and hesitation not long ago into a new stage, and trading is suddenly heating up with this sentiment.

As predicted in our October report 'Rise by 10.89%, BTC may reach new highs after the chaos of the US presidential election': the previous consolidation within the crypto market has been completed, and this month welcomes an external trigger - the conclusion of the US presidential election on November 6th. Republican candidate Trump, who holds a friendly attitude towards crypto, wins the election, leading to continuous new highs in the BTC price, approaching $100,000.

The resolution of the major event of the year has gradually led traders in various financial markets to emerge from chaos and uncertainty and return to their established trading rhythms, with the US stock market experiencing a pump once again. The expectation of the 'Trump Economic Policy' has become the main trading point, with TSL, MicroStrategy, and others becoming the best performers.

BTC also suddenly started in the slump at the end of October, breaking through multiple technical pressures such as the "new high consolidation zone" and the "rise trend line", and continuously set historical highs, surging to a peak of $99860, recording a significant 37.42% rise for the month.

With the warming of the trading market, November saw a huge influx of funds, recording a total inflow of $25.9 billion for the month, making it the largest inflow month in the history of the crypto market.

Against the backdrop of BTC approaching the $100,000 mark, continued capital inflows have finally triggered a sharp rise in Altcoins represented by ETH, as well as a general rise in the market.

EMC Labs comprehensive multidimensional judgment, the second wave of the 'rising period' of the encryption market in this cycle has already started, and future funds in the market will gradually flow into Altcoins, forming a general upward trend.

The potential high inflation caused by the "Trump economic policy" conflicts with the Fed's rate-cutting pace, which has become the biggest uncertainty. However, this uncertainty is just a minor discord in the overall certainty and is not enough to change the market trend.

Macroeconomics: Trump's Economic Policies

The "Trump economic policy" mainly includes tax cuts and deregulation, protectionist trade policies, energy independence and support for traditional energy, fiscal expansion and debt risks, immigration and labor policies, and political and debt management.

The economic policies driven by the 'America First' spirit will pose significant challenges to the existing global trade and financial order, causing unforeseen conflicts and chaos. Even within the United States, there will be seemingly irreconcilable contradictions in terms of economic rise, illegal immigration, and the financial system.

Repatriating illegal immigrants and raising tariffs could both push up inflation, while the federal Intrerest Rate remains high, inflation could rebound, and interest rate cuts could be hindered. On the other hand, not cutting interest rates would undoubtedly make it more difficult for the government to expand fiscal policy, and the high level of debt would further burden the US government.

The Federal Reserve, which is in the process of interest rate cuts and balance sheet shrinkage, is also facing a dilemma. In November, the US CPI rebounded as expected, while employment data and economic conditions remained strong, which means that the need for interest rate cuts has greatly diminished. Although the dot plot and the minutes of the Fed's meeting indicate 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 the professionalism and maintain economic stability, as well as a normalized level of inflation. But Trump has made it clear that he will fulfill his campaign promises through reform and conflict - increasing corporate taxes, imposing more import tariffs, and providing more domestic employment. The two positions are almost irreconcilable, and their contradictions have become public.

Although there is great uncertainty, traders in various markets have already taken sides and given the decision—Long the US economy, with the most optimistic result being "high inflation, high rise".

In November, the Nasdaq, Dow Jones, and S&P 500 recorded increases of 6.21%, 7.54%, and 5.74% respectively, while the RUT2000, representing small and medium-sized enterprises, recorded an increase of 11.01%, reaching a historical high.

Regarding US Treasury bonds, the long-term and short-term yields at the end of the month were 4.177% and 4.160% respectively, both recording a slight decrease, indicating a temporary decline in bearish risks for US bonds.

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 Euro, Renminbi, Japanese Yen, and Exchange Rate all depreciated against the US Dollar. In the future, global funds remain optimistic about the US financial market, and the trend of buying US dollar-denominated assets continues.

Correspondingly, gold, which attracts global safe-haven funds, fell by 3.41% within the month, recording the largest monthly decline in 14 months. As the post-epidemic era gradually emerges, Liquidity is becoming more abundant, and global capital's risk preference is increasing. Equity assets, as well as Cryptos represented by BTC, are the beneficiaries of this increase.

Encryption assets: BTC hits a new all-time high, Altseason is ready to start at any time

In November, BTC opened at $70,198.02 and closed at $96,465.42, with a 37.42% increase and a 47.12% fluctuation. The Trading Volume has significantly expanded.

After returning to the '200-day moving average' and crossing the 'downtrend line' in November, BTC continued to achieve a significant breakthrough in technical indicators this month, breaking through the upper limit of the long-standing 'high consolidation zone' in August, and once again stepping on the 'rise trend line' after a four-month absence.

BTCdaily candlestickPA

On the monthly chart, BTC has achieved three consecutive months of gains with sustained and moderate volume growth, presenting a benign pump trend.

BTC monthly price action

In previous research reports, we have repeatedly emphasized that more than 30% of BTC has undergone Address transfers in the high consolidation zone from March to October this year, and this upward re-pricing has repeatedly occurred in previous cycles, becoming the internal structure support for future price pumps.

The final breakthrough in price requires the impetus of external conditions.

The biggest global event in November was the re-election of Donald Trump as President of the United States, and his previous enthusiasm for crypto and the 'promises' made during the campaign became the emotional catalyst for BTC's breakthrough of the 'new high consolidation zone' that had lasted for eight months.

Is the 'Trump Effect' of BTC sustainable? EMC Labs believes that whether it is last year's proposed '21st Century Financial Innovation and Technology Act', this year's 'US BTC Strategic Reserve Draft', or even the recently passed 'BTC Rights Act' by the Pennsylvania House of Representatives, it indicates that the United States' adoption of Crypto is gradually shifting from 'allowing' to 'promoting', with the goal of gaining control of encryption assets and blockchain industry (public chain, infrastructure, and Decentralization application projects) represented by BTC through legal regulations and national strategic support, ensuring US dominance in this emerging field.

Therefore, the support from US policies and the adoption of Cryptos by traditional institutions including Financial Institutions and listed companies can be expected to continue to increase in the coming years. At no point in history has the Block chain industry and encryption assets been accepted and adopted with such vigor.

Liquidity surges: two channels resonate to create historical records

Continued capital inflow is the material support of the Bull Market.

In November, the total inflow of BTC Spot ETF and Stable Coin through the large channel reached $25.9 billion, setting a record for the largest monthly capital inflow to date. Among them, the ETF channel received $5.4 billion, and the Stable Coin channel received $19.5 billion. In November, the scale of ETF fund inflows exceeded that of February, becoming the month with the largest inflows.

encryption market fund flow monthly statistics

Since October, with the approaching end of the US election, the first to start is the ETF channel funds. Since September, the scale of inflows into this channel has gradually increased, with 1.2 billion, 5.4 billion, and 6.4 billion inflows in September, October, and November, respectively. We have previously emphasized that the funds in the ETF channel have independent will and will gradually control the price movement of BTC. This point has been fully reflected in the recent market.

Compared to the "leader" who bravely shoulders heavy burdens, the Stable Coin channel funds are somewhat slow to react. After entering November, with the continuous breakthrough of BTC price, it began to show a surge in volume. However, the total monthly inflow of funds through the Stable Coin channel reached 19.5 billion US dollars, far exceeding the ETF channel funds.

Encryption market capital flow daily statistics

On the day when BTC broke through the $100,000 mark on November 22, funds in the market began to activate ETH, with a daily increase of 9.31%. The cumulative increase of ETH in November reached 47.05%, surpassing BTC, and the market seems to be opening Altseason.

EMC Labs believes that after BTC breaks the $100,000 mark, Altseason will gradually open up. After Altseason opens, the market will gradually show: 1. ETH breaking through historical highs; 2. Market-wide rise; 3. The main market trend gradually being recognized.

Long and short game: Liquidity gives birth to the second wave of dumping

The cycle is a game of collecting and distributing chips that is carried out by the long and short hands in the space-time range.

The whale collects chips during the declining, grinding, and recovery phases, and continues dumping during the rising and conversion phases until the Liquidity is difficult to absorb the selling pressure, and the market welcomes a reversal.

Since January 2024, in this cycle, the longs have initiated the first wave of large-scale dumping. After the market entered a consolidation phase in March, it returned to chip accumulation. In November, with the recovery of liquidity, the price reached new highs, and the longs have initiated the second and final wave of large-scale dumping in this cycle.

BTC long selling history in the past 15 years

As of the end of September, Changshou Holdings held 14.22 million coins, and by the end of November, the dumping holdings reached 13.69 million coins, with a 'dumping scale' of 530,000 coins in two months.

In the rise period, the reason for the dumping by long hands is the rise in price brought about by Liquidity, and the rise in price is also a self-verification process of the market, which will trigger more capital inflows.

The second dumping with a long hand just took place 2 months ago, and is expected to continue in the first half of 2025, accompanied by the continuous increase in Liquidity.

Conclusion

In November, the cycle once again demonstrated its strong market regulatory ability.

EMC Labs believes that the fundamental reason for the rise in the price of BTC and the entire crypto market is the continued interest rate cuts by major global economies and the significant increase in investor risk appetite on the basis of a well-organized internal structure. In addition, the substantial increase in adoption and the expectation of US national policies have also provided great emotional and material impetus.

We believe that these external factors will continue to provide support for the encryption market in the coming year. Therefore, the encryption bull market will continue to rise after the restart, with some twists and turns in the middle, but the latter part of the rise period is bound to provide more lucrative returns for long-term investors.

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EMC Labs (Emerging Laboratory) was created by encryption asset investors and data scientists in April 2023. It focuses on blockchain industry research and investment in the crypto secondary market, with industry foresight, insights, and data mining as its core competitiveness. It is committed to participating in the thriving blockchain industry through research and investment, and promoting the well-being of humanity through blockchain and encryption assets.