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Bitcoin price took a sharp dive today, as did other top altcoins, after the leading cryptocurrency plunged to 91,564 USD.
Bitcoin has been rejected after several attempts to break through the 100,000 USD level. This failure prompted market participants with large amounts of unrealized profits to start selling their assets.
There is a view that for now, the 100,000 USD level is still too difficult to reach after the relentless rise since Trump’s election victory.
Conditions became even more volatile after the president-elect announced his trade tariff policy via a post on Truth Social. This triggered volatility and revived risk aversion in the market.
Global markets certainly don’t want a trade war, but Trump seems determined to use tariffs as a primary weapon to rebalance the balance with global economic competitors.
Stock futures plunged on the news, despite Trump’s appointment of Scott Bessent, a pro-crypto, Wall Street-friendly hedge fund manager. The S&P500 and NASDAQ slowly recovered to return to trading in the green.
Bitcoin correction happened at the end of November in 2020, at the psychological level of the previous all-time high. Then… 🚀
Now we're correcting at the $100K level, also a psychologically significant price level.
no big deal… 😎 pic.twitter.com/BYgqEjUBo9
— Bitcoin Archive (@BTC_Archive) November 25, 2024
Crypto Market Euphoria Won’t Be Stopped by a Little Market Turmoil – This Correction Will Only Make Bitcoin Stronger
The crypto market responded to the situation as a good reason to realize some profits. On Monday, November 25, outflows from Bitcoin ETFs were recorded at -3,310 BTC (equivalent to $309 million at current bitcoin prices). This happened after bitcoin prices had been declining for four consecutive days.
However, market correction is actually a way to remove the “foam” before the price goes up again. This bull market trend will not stop just like that.
Petr Kozyakov, co-founder and CEO of Mercuryo, a crypto-based payment infrastructure platform, considers this correction as the beginning of a new attempt to break through 100,000 USD.
“ Bitcoin’s drop to 91,000 USD is unlikely to dampen market euphoria. In fact, we may see FOMO (Fear of Missing Out) reach new heights ahead of the holiday season.”
“The upbeat sentiment following the election of Donald Trump as Republican US president continues, with the monumental $100,000 milestone still firmly in sight.”
We agree. It is true that bitcoin is already in the hot zone, as indicated by the market value to realized value (MVRV) ratio.
This ratio measures the comparison between the current bitcoin price and the average price per BTC acquired, providing a rough idea of oversold or undersold conditions in the market.
Reasons Why Bitcoin and Crypto Bull Market Is Still Going On – It’s All in the Data
Last week, the MVRV ratio spiked, indicating increased profitability among BTC holders. This could indicate a greater willingness to sell in order to realize profits. This trend has been visible in the past few days.
However, when comparing BTC to other store of value commodities such as gold (XUG) and silver (XAG), BTC has shown very impressive performance.
While this assumption is not entirely solid, the data suggests a possible shift in assets from precious metals to Bitcoin. This could be a sign of continued strength for BTC.
Meanwhile, the net unrealized profit/loss (NUPL) metric can be used to measure the paper profits held by long-term holders, where the bulk of the BTC supply resides.
Based on data from Glassnode, the NUPL reading is still below the euphoria-greed threshold, which means that this bull market still has a lot of room to continue growing.
Capital Inflows Are a Clear Evidence of Sustained Bullish Dynamics in the Crypto Market
Capital inflows are the strongest indicator that the bullish dynamics in the market will continue.
Data from Glassnode shows total inflows for the 30 days to November 20 reached 62.9 billion USD, with BTC and ETH accounting for $53 billion of that amount.
The velocity of capital flows continued to increase in the following days. On Monday, November 25, total capital inflows over the 30-day period reached 99.5 billion USD.
terms of market enthusiasm, market participants appear to be increasingly encouraged to speculate further, as indicated by the stablecoin balances on exchanges.
Data on November 20 showed the stablecoin balance on exchanges was 9.7 billion USD. Five days later, on November 25, the balance had jumped to 12.7 billion USD.
Trump Monitors Crypto Market Decline and May Be Leaning More To Appoint Pro-Crypto SEC Chair
Trump must have noticed the drop in BTC prices because he is now part of the market. With all the potential conflicts of interest, crypto is now a major focus. This may worry some observers, but not Trump.
The Securities and Exchange Commission (SEC) chairman and the U.S. trade representative are two key positions yet to be filled in the financial sector. This modest correction in bitcoin prices raises the possibility that the president-elect will choose a pro-crypto SEC chairman.
Trump’s crypto-related wealth can no longer be ignored. His sons run World Liberty Financial, but Trump is likely aware that Justin Sun has invested $30 million in the project.
Trump wants to see the WLFI token and the DeFi ecosystem that supports it succeed. Most likely, Trump will drop a big signal about the SEC chairman position in the near future, and BTC will soar past 100,000 USD.
CNBC guest casually saying, "in the not-too-distant future we're going to be thinking about a $1 million Bitcoin price, it's just a confluence of everything happening all at once." pic.twitter.com/XcB8Ol41h3
— Bitcoin News (@BitcoinNewsCom) November 25, 2024
Support for the BITCOIN Act by US Senator Lummis and the Strategic Bitcoin Reserve Plan
David Puell, research associate at Ark Invest, highlighted in their latest newsletter that Senator Cynthia Lummis ’ BITCOIN Act (Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act) is gaining strong support.
At the heart of the BTC Act is a plan to establish a Strategic Bitcoin Reserve (SBR), an initiative that Trump has verbally supported.
Puell noted that Pennsylvania has passed the Bitcoin Rights Bill, which aims to establish a state-level SBR. This opens up the opportunity for other states to follow in Pennsylvania’s footsteps.
The BTC Act requires the Treasury Department to acquire 1 million BTC over a five-year period. To fund this purchase, Lummis proposed that the Treasury sell some of its gold reserves.
There are doubts about how the SBR will work, and whether it could ultimately hurt the US dollar if it goes to its logical conclusion.
Nevertheless, positive discussion about this development, especially if it comes from Mar-a-Lago, could be a big boost for the price of BTC.
Bitcoin Has Entered Wall Street – Microstrategy Becomes More Popular Trade Than Tesla
The latest report from Interactive Brokers shows a table of the 25 most active stocks based on the number of client orders on their platform as of November 26, 2024. Crypto-related stocks dominate this list.
Five crypto stocks made the top 25, with three of them in the top 10. What’s surprising is that Microstrategy (MSTR) is now more frequently traded than Tesla (TSLA).
Interactive Brokers provides an interesting look at this trend, particularly with the impact of the launch of options trading on bitcoin ETFs such as IBIT ( BlackRock’s iShares Bitcoin Trust ), which continues to climb the popularity charts:
“The fact that TSLA was outperformed by MSTR is surprising. However, when we see MSTR at #2, followed by MARA at #5, COIN at #6, and even CLSK at #23, it’s clear that crypto-related stocks are at the forefront of many of our clients’ minds.”
“Investors have always understood that commodity miners offer leverage over the price of the underlying commodity, with profits and losses increasing as the price of the commodity moves above and below its cost of production.
In this case, MARA and CLSK can be considered to have leverage over crypto. COIN also has similar characteristics due to its dependence on the crypto ecosystem.
Meanwhile MSTR, with its strategy of continually selling convertible bonds and using the proceeds to buy bitcoin, is effectively a leveraged crypto holding company.
In fact, the MSTU ETF, which tracks MSTR with 2X leverage, adds an additional layer of leverage.”
“While there are more ‘simpler’ bitcoin ETFs, such as IBIT at #17, it’s worth noting the options activity that accompanies trading in these stocks.
It’s likely no coincidence that the BTC ETF only occasionally appeared at the bottom of the list before options became available, but has now risen to the middle just days after options began trading.
We will continue to watch to see whether options trading will continue to drive interest in this and other bitcoin ETFs.”
Price corrections are a natural part of market dynamics, and this opportunity is the right moment to understand the underlying forces that support the current bullish trend. BTC is expected to break through 100,000 USD in the near future, strengthening its position as a leading digital asset.
