Bitcoin bull market breaks out? $100,000 is just the appetizer, 2025 will be the craziest year!
summary：
Bitcoin bull market breaks out? $100,000 is just the appetizer, 2025 will be the craziest... Bitcoin bull market breaks out? $100,000 is just the appetizer, 2025 will be the craziest year!
Translation:
Despite the lack of price momentum in major global assets and the continued decline in liquidity, Bitcoin surpassed the historic milestone of $100,000 on December 6. This event is regarded as a significant milestone for the cryptocurrency industry, further reinforcing optimism about the continuation of Bitcoin's bull market. Many analysts believe that this bull market could extend at least until the end of 2025.
Bitcoin's Performance Compared to Other Assets
Compared to other traditional assets, Bitcoin's recent performance has been particularly striking. Over the past month, Bitcoin's price has soared by 32%, while other major global assets have generally been weak. Crude oil prices fell by 6.3%, the S&P 500 Index declined by 1%, and gold prices also dropped slightly by about 1%.
This stark contrast not only highlights Bitcoin's resilience in the investment market but also reflects its value as "digital gold," especially in the context of increasing global liquidity pressures.
Signals and Analysis Supporting the Bull Market
The market's bullish sentiment on Bitcoin's future is mainly driven by various technical and market indicators. According to the Net Unrealized Profit/Loss (NUPL) metric for long-term Bitcoin holders, the market has entered the so-called "euphoria stage." NUPL is a key indicator used to measure the proportion of the Bitcoin network that is in profit or loss. When this metric shows that most participants are in profit, it is often considered the peak phase of a bull market.
Quinten François, co-founder of WeRate, noted on social media that Bitcoin’s bull market could continue until the end of 2025. He said, “Bitcoin has entered the euphoria stage. There is roughly 12 months of potential upside before this cycle reaches its peak.” This view aligns with predictions from other market analysts.
James Coutts, Chief Crypto Analyst at Real Vision, further emphasized the impact of the global liquidity environment on Bitcoin prices. He pointed out that despite declining global liquidity, Bitcoin still reached an all-time high, which is an extremely positive signal. However, he cautioned that if liquidity tightens further in the future, Bitcoin's rally might temporarily slow down or experience a pullback.
The Relationship Between Global Liquidity and Bitcoin
Global liquidity is typically measured by the M2 metric, which represents the total amount of cash and short-term bank deposits. This data is crucial in predicting Bitcoin's price volatility. Raoul Pal, founder of Global Macro Investor, mentioned that based on the historical correlation between M2 liquidity and Bitcoin prices, Bitcoin might reach a "local top" of over $110,000 by January 2025.
Notably, when global M2 liquidity bottoms out, it often indicates that Bitcoin's short-term rally could face pullback pressure. However, in the long run, if the liquidity environment improves, it will provide significant support for Bitcoin to rise again. Analysts believe that several macroeconomic events in 2024, such as the U.S. election and monetary policy adjustments, could further influence market liquidity expectations.
Bitcoin's 'Euphoria Stage' and Future Challenges
Bitcoin's current price action undoubtedly demonstrates its uniqueness as an emerging asset. However, the euphoria stage also implies heightened vulnerability to short-term fluctuations. Historical data shows that when Bitcoin enters the high profit/loss zone of NUPL, the market often experiences high volatility and risk.
From a fundamental perspective, the continued involvement of institutional investors and the consideration by more countries to incorporate Bitcoin into their regulatory frameworks are expected to provide long-term support for Bitcoin's price. However, the market must remain vigilant about potential policy shifts, such as stricter cryptocurrency regulations in certain countries, which could quickly reverse market sentiment.
Additionally, technological advancements and the maturity of the ecosystem will have a profound impact on Bitcoin's future development. For example, recent progress in the approval process for Bitcoin ETFs and the widespread adoption of the Bitcoin Lightning Network could further enhance the practical value of Bitcoin.
Tags: Bitcoin, bull market, euphoria stage, global liquidity, cryptocurrency