EMC Labs: BTC close to $100,000, surging Liquidity rekindles the crypto bull market

Author: 0xWeilan, Source: EMC Labs

As we predicted: the internal consolidation of the encryption market has been completed, and this month welcomes an external trigger - the end of the US presidential election on November 6, with the Republican candidate Trump, who holds a friendly attitude towards Crypto, winning. The price of BTC continues to hit new highs, approaching $100,000.

The settlement of the major events of this year has gradually brought traders in various financial markets out of chaos and uncertainty, back to the established trading rhythm, and the US stock market has resumed pumping. The expectation of 'Trump economic policy' has become the main trading point, with TSL, MicroStrategy and other stocks becoming the biggest gainers.

BTC also started suddenly 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', continuously setting new historical highs, with the highest surge reaching $99,860, recording a significant pump of 37.42% for the month.

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

With BTC approaching the $100,000 mark, the continuous influx of funds has finally triggered a sharp rise in altcoins, represented by ETH, and a general rise in the market.

EMC Labs comprehensively judges that the second wave of the "rising period" of the encryption market in this cycle has started, and funds in the market will gradually flow into Altcoins, forming a general upward trend.

The potential high inflation caused by the 'Trump economic policy' is the biggest uncertainty in conflict with the pace of interest rate cuts by the Federal Reserve. However, this uncertainty is just a small discordance in the overall certainty and is not enough to change the trend of the market operation.

Macro Finance: Trump Economic Policy

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.

These economic policies, guided by the "America First" spirit, 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 tensions arise at the levels of the economy, illegal immigration, and the financial system.

Deporting illegal immigrants and raising tariffs could both push up inflation, while the federal Interest Rate remains at a high level, inflation may rebound, and interest rate cuts may be blocked. Not lowering interest rates will undoubtedly make it more difficult for the government to expand fiscal policy, and the high level of debt will further burden the US government.

The Federal Reserve, which is in the process of interest rate cuts and balance sheet reduction, is also facing a dilemma. The November CPI in the United States showed a Rebound as expected, while the employment data and economic conditions continue to perform well, indicating a greatly reduced necessity for interest rate cuts. 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 will likely slow down.

Powell hopes to uphold professionalism, maintain economic stability, and normalize inflation levels. But Trump is clearly committed to fulfilling campaign promises through reform and conflict—increasing corporate taxes, imposing higher import tariffs, and providing more domestic employment. The two positions are almost irreconcilable, and their contradictions have become public.

Despite great uncertainty, traders in various markets have taken sides and given their decision - go long on the US economy, with the most optimistic outcome being 'high inflation, high rise'.

In November, Nasdaq, Dow Jones and S&P 500 rose by 6.21%, 7.54% and 5.74% respectively, while RUT2000, which represents small and medium-sized enterprises, rose by 11.01% and hit a new historical high.

On the US bond side, the long and short end yields at the end of the month were 4.177% and 4.160% respectively, both recording a slight decrease, indicating a temporary decrease in bearish risks for US bonds.

The US dollar index continued to climb, closing at 105.74 in November, up 1.02% from the previous month, while the euro, renminbi, and yen all depreciated against the US dollar. In the future, global funds are 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% in the month, marking the largest monthly decline in 14 months. With the gradual emergence from the post-epidemic era, Liquidity is becoming increasingly abundant, and global fund risk preferences are rising. Equity assets, as well as Crypto represented by BTC, are the beneficiaries of this increase.

encryption assets: BTC hits a new high, Altseason ready to start

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 expanded significantly.

After returning to the '200-day moving average' and crossing the 'downtrend line' in November, BTC continued to achieve a breakthrough in technical indicators this month, breaking through the long-standing 'high consolidation zone' upper resistance of August, and once again stepping on the 'rise trend line' after a gap of 4 months.

BTC daily candlestick PA

On the monthly chart, BTC has achieved three consecutive months of rising and the trading volume has been steadily increasing, showing a benign pump trend.

BTC monthly PA

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

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

The biggest event in November was the re-election of Donald Trump as the President of the United States. His enthusiasm for Crypto and his promises during the campaign became the emotional catalyst for BTC to break through the long-standing 'new high consolidation zone' that had lasted for eight months.

Is the 'Trump market' of BTC sustainable? EMC Labs believes that whether it is last year's proposed '21st Century Financial Innovation and Technology Act' or this year's 'US BTC Strategic Reserve Draft', or even the recently passed 'BTC Rights Act' by the Pennsylvania House of Representatives, all indicate that the US's adoption of Crypto is gradually shifting from 'allowing' to 'promoting', with the goal of ultimately gaining control over encryption assets and blockchain industry (public chains, infrastructure, and Decentralization applications) represented by BTC through legal regulations and national strategic support, ensuring that the US obtains a dominant advantage in this emerging field.

So, in the coming years, the support from the US policy and the adoption of Crypto by traditional institutions including Financial Institutions and listed companies can be expected to continue to increase. At any previous moment in history, the Block industry and encryption assets have never received such a high level of acceptance and adoption.

Liquidity Surges: Two Major Channels Resonate to Create Historic Records

Continuous inflow of funds is the material support of the bull market.

In November, the total inflow of BTC Spot ETF and Stable Coin reached 25.9 billion US dollars, setting the largest monthly inflow on record. Among them, the ETF channel had 5.4 billion, and the Stable Coin channel had 19.5 billion. In November, the scale of ETF fund inflow exceeded that of February, becoming the largest inflow month.

encryption market fund flow monthly statistics

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

Compared to the 'leading brother' who bravely shoulders heavy responsibilities, the Stable Coin channel funds seem a bit slow to react. After entering November, with the continuous breakthrough of BTC prices, a trend of substantial inflow has just begun to emerge. However, the total monthly inflow of Stable Coin channel funds reached 19.5 billion US dollars, far exceeding ETF channel funds.

Encryption market capital flow daily statistics

On the day when BTC hit the $100,000 mark on November 22, funds in the market started to move towards ETH, which saw a daily increase of 9.31%. The cumulative increase of ETH in November reached 47.05%, surpassing BTC. It seems that the market is entering Altseason.

EMC Labs believes that after BTC breaks through the $100,000 barrier, Altseason will gradually open up. After Altseason opens, the market will gradually show: 1. ETH breaks through a new all-time high; 2. The market rises in general; 3. The main trend of the market is gradually recognized.

Long and short game: Liquidity gives rise 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.

Long hands collect chips during the downward, grinding, and recovery phases, while continuously dumping during the upward and conversion phases, until Liquidity is difficult to absorb the selling pressure, and the market welcomes a reversal.

Since January 2024, the longs have initiated the first wave of large-scale dumping in this cycle, and after the market entered consolidation in March, they returned to the state of chip accumulation. In November, with the recovery of Liquidity, the price hit new highs repeatedly, and the longs have initiated the second wave of dumping, which is also the last wave of large-scale dumping in this cycle.

BTC long-selling history in the past 15 years

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

During the rise period, the motivation for long-hand dumping is the rise in price brought about by Liquidity, and the rise in price is also a self-fulfilling process in the market, which will trigger more funds to flow in.

The second dumping of Changshou just took place for 2 months, and with the continuous increase of Liquidity, it is expected to continue in the first half of 2025.

Conclusion

In November, the cycle once again demonstrated its strong market regulation capability.

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

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