In the past week, BTC has continued to rise, successively breaking through $96,000, $97,000, $98,000, and $99,000 ATH. The market's attention on BTC has returned to its peak, eagerly anticipating BTC to break through $100,000. Not only has the BTC Google search index skyrocketed, but Microstrategy has also exercised its over-allotment option for its convertible bonds, with its MSTR maturing in 2029 closing above $104 on the first trading day.
On the 23rd, after BTC broke through the ATH of $99,588, the market struggled to maintain its upward momentum and fell to around $95,734. Although it rebounded to around $98,000, BTC entered a downward channel on the night of the 25th, reaching a low of $92,326.31, with a maximum drop of 6.5% in 24 hours. Currently, BTC is fluctuating around $93,000 (the above data is sourced from Binance spot, November 26, 17:00).
Although BTC has experienced its largest correction in nearly half a month, the crypto market has not reacted as violently as before. Not only did ETH not follow the decline, but most altcoins also did not enter a crash, with some even showing slight increases. With Trump about to take office, BTC investors taking profits, and the complex leverage effects, BTC's volatility may further increase in the future.
BTC technical indicators have entered a short-term overbought phase, with some long-term holders taking profits
Since Trump's victory, BTC technical indicators have shown a severe overbought state. Before this week, BTC was the only investment target in Trump's economy that had not seen profit-taking, and as public FOMO sentiment intensified, many long-term holders chose to cash out. Crypto Banter analyst Kyledoops pointed out that long-term holders have sold 128,000 BTC, although BTC ETFs absorbed 90% of the selling pressure during the same period.
Excessive market FOMO sentiment may benefit future market development through BTC price pullbacks
Microstrategy exercised its $400 million over-allotment option based on $2.6 billion in convertible bonds (0% coupon, 55% premium), raising the final scale to $3 billion. This batch of convertible bonds maturing in 2029 closed above $104 on the first trading day.
At the same time, the market quickly launched Microstrategy's leveraged ETFs (MSTX, MSTU), providing retail investors with more "suboptimal" ways to leverage trade BTC spot. According to Bloomberg reports, the high demand for these leveraged ETFs has put pressure on the main brokers responsible for securities lending, with related asset management scale surging to nearly $5 billion in the past week.
Public opinion is also continuously raising BTC's visibility, with well-known television commentators suddenly changing their stance to support cryptocurrencies and suggesting that investors hold BTC at high points. Market FOMO further exacerbates the recent market bubble, leading to a significant increase in leverage at current levels and causing actual volatility to rise sharply.
Macroeconomic Interpretation
Strong U.S. economic indicators increase the likelihood of a soft landing
Data shows that over $448 billion has flowed into the U.S. stock market this year, breaking the 2021 record and reaching unprecedented levels. Meanwhile, Nvidia's earnings report exceeded expectations, and U.S. stocks remain strong. Economic indices have rebounded to robust first-quarter levels, while inflation data has not yet broken upward. The high-income consumer index has reached a new high, and the consumption power of the U.S. (high-income) group remains strong. From the data, the possibility of a soft landing for the U.S. economy has increased.
Lebanon-Israel conflict may be nearing an end, with safe-haven funds withdrawing
As the Lebanon-Israel conflict approaches its end, safe-haven funds are withdrawing. In addition to the cryptocurrency market, overnight gold, oil, and other commodity markets have also seen significant declines. As of the close of the night session on November 25, London gold, London silver, COMEX gold, and COMEX silver all fell over 3%.
CCTV News reported that on November 25, local time, U.S. State Department spokesperson Matthew Miller mentioned the Lebanon-Israel ceasefire agreement at a briefing, stating that the ceasefire agreement "has not yet been reached," but the U.S. believes that the gap between the negotiating parties' differing opinions on the ceasefire agreement has "greatly narrowed," although some measures still need to be taken to promote its conclusion. The U.S. is pushing for negotiations "as much as possible."
On the 25th, local time, Lebanese MTV reported exclusive news that Lebanon has received a ceasefire notification and will announce it tomorrow night. According to the Israel Times, Israel has in principle agreed to reach a ceasefire agreement with Hezbollah with U.S. support.
Trump's tariff remarks cause huge fluctuations in the foreign exchange market
On the 25th, local time, Trump stated that he would impose a 25% tariff on all products entering the U.S. from Mexico and Canada. Following this news, the currencies of Canada and Mexico fell over 1% against the dollar, exacerbating volatility in the foreign exchange market, which has a daily trading volume of up to $7.5 trillion, with emerging market currencies generally weakening. Commodity currencies such as the Australian dollar and New Zealand dollar also fell. The Asia-Pacific market stock markets were similarly under pressure, declining across the board.
Market Recommendations
The current market FOMO remains high, and it is recommended that investors remain rational in the face of an overbought state that has not significantly eased. Proper asset allocation should be conducted while ensuring sound risk control, capturing profits while further avoiding risks. Additionally, given Trump's past tendency to convey unfiltered thoughts and policy intentions directly through social media, the market will be filled with speculation and conflicting trading ideas, making it crucial to maintain flexibility in asset allocation.
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