As a seasoned analyst with over two decades of experience in global finance, I’ve seen my fair share of market cycles and trends. The recent surge of Bitcoin to $100,000 is nothing short of remarkable, especially against the backdrop of sluggish performance in other major global assets.
As a researcher studying the cryptocurrency market, I found an intriguing development: Bitcoin surpassed the significant $100,000 mark, bucking the trend of stagnant prices in many major global assets and thriving amidst decreasing global liquidity.
For the very first time, Bitcoin (BTC) breached the $100,000 mark on December 6th, marking a significant and eagerly anticipated achievement in the annals of cryptocurrency history.
Despite a slowdown in other significant worldwide investments, Bitcoin reached an all-time high recently. Over the last month, Bitcoin’s value increased by 32%, whereas oil prices decreased by 6.3%, the S&P 500 experienced a 1% decline, and gold dropped by 1%.
The upward trend of Bitcoin compared to other international investments suggests a hopeful sign for Bitcoin investors, fueling predictions among analysts that this current bull market will persist until the year 2025 – a phase often referred to as the “euphoria stage” within crypto trading jargon.
Bitcoin to rally until the end of 2025 in “euphoria stage”
As an analyst, I’ve observed that my own analysis indicates we’re witnessing the euphoria phase for Bitcoin, as evidenced by the long-term holder net unrealized profit/loss (NUPL) metric. This means that a significant number of long-term holders are currently in profit, suggesting widespread optimism and potential market saturation.
According to Quinten François, co-founder of WeRate, this prolongation might keep Bitcoin’s upward trend lasting up until the end of 2025 as he suggested in his December 7 post on Medium.
“Bitcoin is entering the euphoria stage. You have a maximum of 12 months before the cycle top.”
The NUPL is used to measure whether the overall Bitcoin network is at a state of profit or loss, based on the difference between unrealized profit and unrealized loss among BTC holders.
A significant indication pointing towards Bitcoin’s future trend is that its record high was achieved amidst a global liquidity context, as stated by James Coutts, the chief crypto analyst at Real Vision, in his December 6 blog post.
“Bitcoin has hit new ATHs in the face of a deteriorating liquidity backdrop. If conditions worsen, the rally, while euphoric, can only last for a limited time. If conditions ease from here, then a pullback is warranted, but then off we go again.”
The possibility of a base in worldwide M2 liquidity, which represents total cash and short-term bank holdings, might mean that Bitcoin could continue its upward trend temporarily before a possible downturn.
According to Raoul Pal, the founder and CEO of Global Macro Investor, Bitcoin may reach a “peak” or high point above $110,000 by January 2025 due to its relationship with the liquidity index.
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2024-12-07 17:31