The wait has finally paid off. Bitcoin is in 'discovery mode,' making new all-time highs on a near-daily basis. Several key factors align perfectly: ETFs opened the gates to Wall Street, the fourth halving cut the $BTC supply, the Fed hints at lower rates, and the US election favors crypto. The market dynamics have now changed. The price climbs steadily without the wild swings of previous bull runs.
According to Ecoinometrics' analysis, Bitcoin's metrics currently place it firmly in a mild bullish regime, characterized by:
- Consistent positive returns
- Low volatility
- Steady but not extreme momentum growth
These conditions appear optimal for Bitcoin investors. You get growth and some volatility, but not so much that it suggests a looming cycle peak or significant downturn. Mild bullish is good bullish.
Nearly a year after the launch, ETF flows continue to dominate Bitcoin's price action. The pattern is clear: prices only rise with increasing inflows, and significant inflows consistently push prices higher.
Global liquidity keeps reaching new highs. As seen in previous cycles, when global liquidity increases, Bitcoin's price tends to rise shortly afterward.
Global Liquidity made new highs earlier this year (Source)
As more money flows into the global financial system, it finds its way into (perceivable) risk assets, including Bitcoin. Global liquidity reached new peaks a few months ago. Now, Bitcoin is catching up on that move.
Furthermore, the Fed has cut interest rates again, making Bitcoin a more appealing investment compared to treasuries or savings accounts. When yields decrease on traditional options, people look for alternatives.
Fed Target Rate has dropped again this month (Source: BMPro)
We are witnessing a favorable macro environment characterized by increasing global liquidity and falling interest rates. Furthermore, the newly elected U.S. president is supportive of Bitcoin. These factors are currently driving Bitcoin's price higher and are expected to continue doing so well into 2025.
"Maybe the US will find ways to slow down debt growth and reduce debt servicing costs. But that's unlikely. Which means the only realistic way to deal with the debt is through monetary debasement. The writing is on the wall. Now is a good time to start hedging against it." (Ecoinometrics on X)
With the favorable Bitcoin market conditions, Dogecoin and Shiba Inu led gains among major altcoins. Late Sunday, $DOGE surpassed $XRP and $USDC stablecoin to become the sixth-largest token.
DOGE has more than doubled in the past month amid renewed trading interest. As a fun fact, Elon Musk recently proposed creating a "Department of Government Efficiency" (D.O.G.E) to optimize government spending. Trump then stated that he would appoint Musk to lead a "government efficiency commission" if he wins a second term.
While traders are generally eyeing the $100,000 price level for BTC in the short term, the defunct Mt.Gox exchange reportedly moved over $2 billion worth of BTC to a new address.
Such wallet transfers typically represent the consolidation of holdings to new addresses before sending them to cryptocurrency exchanges for selling on the open market. This scenario could amplify a local price pullback, potentially closer to the $100,000 mark.
MetaTalks disclaims responsibility for any investment advice that may be contained in this article. All judgments expressed are solely the personal opinions of the author and the respondents. Any actions related to investing and trading in crypto markets involve the risk of losing funds. Based on the data provided, you make investment decisions in a balanced, responsible manner and at your own risk.