The hype season ignites market sentiment, can Bitcoin break 100,000 USD in December?

Since Trump won the U.S. election, the crypto market has experienced explosive growth. Bitcoin, as the leader, saw a monthly increase of over 37% in November, appreciating more than $26,000, which pushed the total market capitalization of the entire cryptocurrency market to surge over $1 trillion, with an increase of about 45%. This wave of growth not only brought Bitcoin back into the spotlight for investors but also allowed altcoins to experience a long-awaited upward trend, with market sentiment soaring.

Bitcoin Consolidates, Altcoins Surge

After continuously setting price ATHs, Bitcoin encountered resistance at the $100,000 mark and exhibited a volatile trend. Market funds began to shift their focus to altcoins. In the past week, the market share of altcoins rose from 8.91% to 11.0%, and their daily trading volume share increased from 23% to 37%. Both new and old altcoins started to rotate sectors, with astonishing gains. The total market capitalization of altcoins rose nearly 70% in November.

Among them, the performance of the established altcoin XRP was particularly remarkable. With the resignation of the SEC chairman reducing litigation pressure, the XRP spot ETF application, and support from Korean whales, XRP surged 400% in a single month, reaching an all-time high. Its market capitalization surpassed USDT and Solana, ranking third in the cryptocurrency market cap list, and even surpassed Pinduoduo, rising to the 138th position among global mainstream assets.

In the crypto market, the value of altcoins is often difficult to quantify and can only be roughly estimated by benchmarking against leading projects in the sector. XRP's explosive growth, with an FDV exceeding $260 billion, has reshaped the valuation framework for most altcoins in the market, releasing the valuation potential of many altcoins and demonstrating a strong profit-making effect. The arrival of altcoin season has made the market lively.

Can Bitcoin Reach New Heights in December?

Bitcoin's rapid rise in November led to a significant amount of profit-taking trades, and the $100,000 mark remained unbroken. Data also shows that the net position changes of long-term Bitcoin holders are declining, approaching levels seen around March 2024, causing many investors to worry that the current crypto market may be overheated. However, from multiple perspectives, Bitcoin still has considerable upside potential in December.

1. U.S. Stock Market Christmas Rally Boosts Market Optimism

As the holiday season approaches, the U.S. stock market often experiences a Christmas rally, where stock prices tend to rise around Christmas. This increase is often influenced by holiday optimism, increased holiday spending, and year-end trading by investors. Since 1950, the average increase of the S&P 500 index during the Christmas rally period has been about 1.3%.

Due to the high correlation between the U.S. stock market and the crypto market, the positive sentiment in the stock market is expected to provide a stable external environment for the crypto market.

2. Bitcoin's Historical Performance After Halving in December

Data shows that after Bitcoin's halvings in 2012, 2016, and 2020, December saw significant increases with a success rate of 100%. In December 2012, the price rose from $12.57 to $13.45, yielding a return of 7%. In December 2016, the return was 30.8%, and in December 2020, it was 46.92%. The returns for this month are still worth looking forward to. Notably, Bitcoin's 7.35% increase in September this year marked its best historical performance; historically, whenever Bitcoin has closed up in September, it has risen until the end of the year. Historical trends suggest that Bitcoin has a considerable opportunity for significant upward movement this month.

3. The Federal Reserve Likely to Continue Cutting Rates in December

Interest rate cuts are a long-term focus for the market. The Federal Reserve announced a 0.5% rate cut in September and further reduced it by 0.25% in November, accelerating the global rate-cutting pace and boosting global market sentiment. Recent U.S. economic data shows that while inflation remains stubborn, the downward trend has not changed. Unless the employment or inflation report for November is unexpectedly strong, the Federal Reserve is likely to continue cutting rates in December. This will prompt funds that are currently in a wait-and-see mode or trapped in low-yield investments to seek higher-yield investment channels, accelerating the global shift of funds towards risk assets. Bitcoin, as a highly valued asset with significant appreciation potential, will attract some of this liquidity.

4. Trump's Inauguration Period is a Major Speculation Phase

Last week, Trump's cabinet was largely formed, with almost all members being cryptocurrency enthusiasts, including Trump's own cabinet collectively having exposure to this emerging asset. This "everyone is trading crypto" stance has significantly raised market expectations for the implementation of future crypto-friendly policies, becoming an important support for the continuation of the December market.

Historically, many Trump trades peaked during the inauguration ceremony in January after the 2016 election. From historical experience, whether it was Trump's assassination attempt or his successful campaign, the crypto market has shown extremely intense reactions. Although the inauguration ceremony on January 20 is seen as a potential market peak, the accumulation of market sentiment often manifests in advance. Currently, December may become a key window period for investors to position themselves.

5. Continuous Inflows into ETFs and On-Chain Funds

The continuous inflow into ETFs and on-chain funds has also provided strong support for the heat of the crypto market. Thanks to Trump's commitment to implementing favorable policies for the crypto industry, Bitcoin and Ethereum ETFs set new records for net inflows in November, reaching $6.5 billion and $1.1 billion, respectively, indicating strong market demand for these two crypto assets.

Net inflows into Bitcoin and Ethereum ETFs in November

On the other hand, the issuance of USDT is also accelerating, with over $13 billion issued in November, the fastest rate since 2021. Currently, the total market capitalization of stablecoins has surpassed $193 billion, reaching an all-time high, with a 2.3% increase in the past week.

Market capitalization of stablecoins

Additionally, the rise of the Phantom wallet has provided a window for observing the market. On November 21, within just half a month, the Phantom wallet's ranking in the Apple App Store jumped from obscurity to first place in the tools category, reaching as high as sixth overall. According to data analysis from Similarweb, Phantom's recent U.S. user traffic share reached 27.38%, with a significant growth of 24.82% in the past month, indicating that the crypto market is attracting more and more participants.

Conclusion

Although Bitcoin faced some resistance after its rapid rise in November, multiple positive factors are collectively influencing the cryptocurrency market, laying an optimistic foundation for Bitcoin and the entire altcoin sector's performance in December. Bitcoin may end 2024 with overwhelming positive momentum. 4E, as the official partner of the Argentine national team, supports spot and contract trading for over 200 crypto assets, including Bitcoin, Ethereum, SOL, XRP, and more, covering various sectors with high liquidity and low fees.

At the same time, 4E integrates traditional financial assets into the platform, establishing a comprehensive one-stop trading system that covers everything from deposits to crypto assets, as well as U.S. stocks, indices, foreign exchange, and precious metals like gold, with over 600 different risk-level assets available for investment at any time with USDT. Additionally, the 4E platform has a $100 million risk protection fund, adding another layer of security for users' funds. With 4E, investors can keep up with market dynamics, flexibly adjust strategies and allocations, and seize every potential opportunity.