Matrixport Research: Short-term overbought, strong capital inflow boosts Bitcoin higher

After seven months of consolidation, the BTC spot ETF has experienced unusual inflows of capital. Starting with a 50 basis point rate cut in mid-September, Federal Reserve Chairman Powell assured the market of an extended rate cut cycle, which further accelerated the inflow of funds into the BTC spot ETF.

Due to the price increase and heightened media attention, BTC's strong momentum is expected to continue until December, attracting new investors. Optimism also surrounds Trump's inauguration on January 20, 2025, which could bring a more favorable cryptocurrency regulatory environment, including the appointment of a new SEC chairman. Additionally, the anticipation of FTX's upcoming announcement to return $16.5 billion to creditors may also support market sentiment. These factors create a favorable backdrop for sustained bullish sentiment and price stability for BTC.

By 2025, cryptocurrency assets are expected to cross the 8% adoption threshold, marking a significant turning point that will lay the foundation for broader adoption.

Several key factors driving BTC to new highs this quarter include three major changes in the U.S. regulatory landscape. First, on December 6, S&P Global may announce the inclusion of MicroStrategy in the S&P 500 index, prompting index funds to enter the market. Second, on December 10, Microsoft will review a proposal to invest in BTC despite opposition from its board.

Previously, the National Center for Public Policy Research in the U.S. submitted a proposal based on the "2025 Plan," recommending that BTC be evaluated as an investment target. Finally, starting December 15, 2024, the Financial Accounting Standards Board (FASB) will introduce new regulations allowing cryptocurrency assets to be listed at fair market value in company financial reports, encouraging finance departments to include BTC on their balance sheets.

Historically, when BTC's Relative Strength Index (RSI) reaches overbought levels or the 30-day rolling return exceeds 40%+, its price often consolidates as momentum cools. However, given the recent overbought phenomenon, a brief consolidation phase may occur. Nevertheless, many positive factors are gradually emerging.

Observing Bitcoin's current momentum through the 7-day rolling price change rate (in USD), as the BTC price rises, the absolute price difference increases. The recent 7-day price surge of $19,265, reaching an all-time high, also indicates that this is an unprecedented rebound in intensity.