On December 6, 2024, Bitcoin achieved a remarkable milestone, surpassing the $100,000 threshold for the first time. This significant ascent of 32% over the past month occurred while traditional assets such as oil, gold, and the S&P 500 faced challenges in maintaining stability.
Oil prices declined by 6.3%, the S&P 500 dipped 1%, and gold depreciated by 1% in value, in contrast to Bitcoin’s standout performance that captured global attention.
Quinten François, co-founder of WeRate, expressed his views on the upward trend via X, deeming this the commencement of Bitcoin’s “euphoria stage.” In a social media post, he stated, “You have a maximum of 12 months before the cycle top,” alluding to a phase in market cycles characterized by peak investor enthusiasm.
The “euphoria stage” in the crypto market is marked by heightened excitement and optimism, typically leading to further price increases.
François based his prediction on the Net Unrealized Profit/Loss (NUPL) metric, which indicates whether a majority of Bitcoin holders are making a profit or incurring losses. A high NUPL implies that many Bitcoin holders are in profit, often fueling price surges.
Moreover, liquidity, referring to the amount of money in circulation within the economy, has been on the decline in numerous regions globally, impeding the growth of other markets. Nevertheless, Bitcoin has continued to thrive.
Jamie Coutts, chief crypto analyst at Real Vision, described the situation as follows: “Bitcoin has hit new all-time highs despite a deteriorating liquidity backdrop. If conditions deteriorate further, the rally, though euphoric, will have a limited duration.” He also warned that worsening conditions could decelerate the rally, while improvements might propel prices even higher.
However, Raoul Pal, CEO of Global Macro Investor, anticipates more record-breaking achievements. He forecasts that Bitcoin could reach a “local top” of $110,000 by January 2025, citing the correlation between Bitcoin’s growth and global money supply, or M2 liquidity. In essence, if this liquidity persists in improving, Bitcoin’s price may sustain its upward momentum.
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