Bull Run Engaged, How High Can BTC Go This Time?

24-11-12 12:03

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Original Title: "WOO X Research: Bull Run Initiated, How High Can This BTC Cycle Go?"

Original Source: WOO X Research

Background: BTC $73,000, Potentially the Bottom Support for This Cycle

Bitcoin broke out of a six-month consolidation phase on November 6th, surpassing $73,000. The underlying reasons are closely tied to Trump's election victory and the start of a rate-cut cycle.

· Trump's Election Victory: Pre-election promises included multiple crypto-friendly policies, such as making the U.S. a global crypto capital and removing the current SEC chairman. Although it is uncertain whether these promises will be fulfilled after taking office, it is foreseeable that the crypto market has often faced regulatory pressures in the past. The relief of this situation after Trump's inauguration will undoubtedly be a major factor driving the market upwards.

· Start of Rate-Cut Cycle: Rate cuts imply that the U.S. is releasing more liquidity into the risk markets, theoretically boosting the stock market, other fiat currencies, and asset classes. Bitcoin, as the riskiest and relatively smaller market cap asset, can also benefit from this. The rate cut in November brought positive reactions in the traditional financial sector, with the S&P closing at a new high and bond prices rising. The transmission of liquidity often takes time, with 2024 Q4 left as an opportunity for the crypto market to absorb the overflow of liquidity.

From policy actions to liquidity injection, we are currently in the "early bull" phase. Due to the nature of Bitcoin's previous cycle where the previous high acted as the new cycle's low, we can boldly assume $73,000 is the support price for this bull market cycle.

With the support confirmed, what could be the price target for Bitcoin in this bull cycle? WOO X Research will take you on a journey to find out.

BTC Compared to Other Mainstream Assets: $110,000 to $220,000

The current market cap of Bitcoin is $1.6 trillion, surpassing Meta last month and ranking ninth globally, just after silver. Since the approval of the Bitcoin spot ETF in January this year, Bitcoin is no longer seen as a niche asset but has become a mainstream asset. Fueled by Trump's election, Bitcoin has entered the public eye more prominently, and its growth potential can now be compared to other mainstream assets.

As known to many, Bitcoin is often referred to as digital gold, with Bitcoin's market cap currently around 9% of gold's market cap. Below are simulations of various scenarios to estimate Bitcoin's potential future price:

· If Bitcoin's market cap reaches 25% of gold's, at $4.5 trillion, the price will reach $226,162

· If Bitcoin's market cap equals NVIDIA's, the price will reach $183,645

· If Bitcoin's market cap surpasses Google, ranking fifth, the price will reach $111,730

In terms of market cap, during this bull run, Bitcoin is expected to break into the global top five assets, with the expected price range at $111,000 to $226,000.

Bitcoin Top Cap Indicator: Top at least $200,000

This indicator uses two data points to make the assessment:

· Two-Year Moving Average (730 days, green line)

· Five times the Two-Year Moving Average (red line)

Usage:

· When Bitcoin's price is below the Two-Year Moving Average (green line), it is a good time to buy Bitcoin

· When the price exceeds five times the Two-Year Moving Average (red line), this is a signal to sell Bitcoin

How to interpret this indicator? It indicates whether the short-term price breaks through/falls below the average price held by long-term holders. The low point benchmark is the average price over the past two years. If the price is below the green line, it means it has dropped below the low point of the past two years, indicating excessive panic selling—a good long-term buying opportunity.

The red line represents five times the average price over two years. Breaking through this line indicates the market is overly influenced by FOMO, often a signal of overheating, suitable for selling.

Reviewing Bitcoin's past price performance, it broadly follows this pattern. According to the information shown in the following figure, the Bitcoin price on 11/6 was around $75,000, the red line price was $207,977, and recently, Bitcoin's price has continuously hit new highs, causing the red line price to rise. This indicator suggests that the peak price of this cycle will be at least $200,000.

Pi Cycle Top Indicator: Top at least $110,000

This indicator uses two sets of data to determine if Bitcoin is in an overheated state:

· 111-Day Moving Average (111DMA, red line)

· Two times the 350-Day Moving Average (350DMA x 2, green line)

Usage:

The usage is as follows:

When the 111-day moving average is trending upwards and crosses twice the 350-day moving average, it usually indicates that the Bitcoin price has reached the top and is a sell signal.

How to Interpret This Indicator?

The implication of the Pi Cycle Top indicator is to observe whether the short-term price breaks above the long-term holders' average price and use this to judge the market's overheating level. When the 111DMA (red line) crosses above the 350DMA x 2 (green line), it usually means the market is overly optimistic, experiencing Fear of Missing Out (FOMO) sentiment, often a signal of overheating, and it is suitable to consider selling.

According to the latest chart information, on November 6, 2024, the Bitcoin price is around $75,621, while the price of 350DMA x 2 is around $117,390. This indicates that when the Bitcoin price approaches or exceeds this price level, it may be a top signal for this market cycle.