Original | Odaily Planet Daily ( @OdailyChina )
Author | Fu Howe ( @vincent 31515173 )
Yesterday, Bitcoin successfully broke through $104,000 and set a new historical record. Before the market digested the joy brought by this price, Bitcoin began to plunge downward today. OKX market data showed that the price of BTC once fell to $90,000 at 6 am this morning, with the maximum drop of nearly 10% in 1 hour. As of press time, the price of BTC has rebounded to $97,700.
However, this short-term decline in Bitcoin did not significantly affect the trend of other altcoins. Among them, SOL rose 9% against the trend after a brief small spike, and other altcoins such as ETH rebounded after a small spike.
After experiencing sharp rises and falls, can Bitcoin return to $100,000 and stabilize again this year? Can the long-awaited alt season of the market come smoothly?
Reason: Psychological expectation is $100,000, and market sentiment needs to be released
The sharp fluctuations in this market are caused by many factors, the core reason being the release of emotions.
Why do we say that the core reason lies in the emotional aspect? When the author first came into contact with cryptocurrencies, some people said that Bitcoin would reach $100,000 in the future, and as time went on, this target was mentioned more and more. Especially after Bitcoin broke through the high point of the previous bull market in this round of bull market, $100,000 seemed to become an obsession in the hearts of crypto investors. This caused most people to start taking profits after Bitcoin reached $100,000.
CryptoQuant analysts said that long-term Bitcoin holders (LTH) began to profit after BTC broke through the $100,000 mark. CryptoQuant data showed a significant increase in the Long-term Holder Spend Output Profit ratio (LTH-SOPR), which measures the profit level of long-term Bitcoin investors by comparing the selling price of Bitcoin to the price they originally paid.
Julio Moreno, head of research at CryptoQuant, said: “As the price of Bitcoin rises above $100,000, long-term holders (LTH) have been taking profits. However, this is normal during Bitcoin bull runs and profit-taking is still far from extreme levels.”
This kind of profit-taking has a positive effect on the current crypto market. Previously, Bitcoin has been independent for most of the time, and other altcoins have had a small increase. After this spike, other altcoins rebounded quickly, which seems to have also verified that part of the funds of those who have taken profits from Bitcoin will flow into other altcoins, which has a positive effect on the rotation of sectors.
In addition, market sentiment is also affected by macroeconomic factors. Investors expectations for the upcoming US non-farm payrolls data have exacerbated market volatility. Economists generally predict that new jobs will increase in November, and strong employment data may cause the Federal Reserve to reassess its interest rate cut policy. If the data is strong, the Federal Reserve may slow down the pace of interest rate cuts, thereby pushing the US dollar to strengthen, which will put some pressure on risky assets including Bitcoin.
Future trend analysis: There are still many positive factors, and $120,000 becomes the new mark
Looking ahead, Bitcoin’s price action could be influenced by multiple factors:
Impact of non-farm payrolls: The non-farm payrolls data released tonight will be the focus of the market. If the data is strong, it may trigger a further decline in the price of Bitcoin; conversely, if the data is weak, market sentiment may improve, thereby driving a rebound in Bitcoin. Investors need to pay close attention to these economic indicators because they have an important impact on the Federal Reserves monetary policy.
Changes in the macroeconomic environment: In addition to employment data, changes in the overall macroeconomic environment will also affect the trend of Bitcoin. The Federal Reserves monetary policy, interest rate changes, and fluctuations in the global economic situation may have a profound impact on the Bitcoin market. The market generally expects the Federal Reserve to cut interest rates by 25 basis points at its meeting this month. This expectation may stimulate market liquidity and provide support for Bitcoin prices.
Continued support from institutional investors: The interest of institutional investors continues to rise, and WeFi co-founder Maksym Sakharov pointed out that many institutional investors are steadily accumulating Bitcoin to cope with inflation and economic uncertainty. This continued demand will provide support for Bitcoin prices, especially during market turmoil.
Investor sentiment and market confidence: Market sentiment and investor confidence will continue to have an impact on the price of Bitcoin. Although the current market has experienced turbulent fluctuations, the speed of the rebound has also made many investors optimistic about the long-term prospects of Bitcoin. With the participation of more institutional investors, market confidence is expected to recover, driving the price of Bitcoin to break upward.
In general, this spike is an emotional release after the goal has been achieved, and the general direction remains unchanged. We expect the crypto market to continue to rise in 2025, and there seems to be no major resistance ahead.
