The bull market has started, how high can BTC rise this round?

Author: Woo X Research

Bitcoin broke out of a six-month consolidation range on November 6, surpassing $73,000, with the underlying reasons closely related to Trump's election victory and the initiation of a rate-cutting cycle.

• Trump's election victory: Prior to the election, he promised to implement several crypto-friendly policies, including making the U.S. a global cryptocurrency hub and removing the current SEC chairman. While it is uncertain whether he can fulfill these promises once in office, it is foreseeable that the regulatory pressure that the crypto market has often faced will ease under Trump's administration, undoubtedly a major factor driving the market upward.
• Initiation of the rate-cutting cycle: Lowering interest rates means the U.S. is releasing more liquidity into risk markets, theoretically boosting stock markets and other fiat currency asset classes. As the asset with the highest risk and relatively smaller market capitalization, Bitcoin can also benefit from this. In November, the interest rate was cut by 25 basis points, and the market reacted positively in traditional finance, with the S&P closing at a new high and the bond market rising. However, the transmission of liquidity often takes time, and Q4 2024 presents an opportunity for the crypto market to absorb the overflow of liquidity.

From policy to liquidity injection, we are currently in the "early bull" phase. Given that Bitcoin's previous peak is characteristic of a new cycle's bottom, we can boldly assume that $73,000 is the support price for this bull market.

With support confirmed, how high can Bitcoin's price go in this bull market? WOO X Research takes you on a journey to explore.

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

Currently, Bitcoin's market capitalization is $1.6 trillion, having overtaken Meta last month, ranking as the ninth largest asset globally after silver. Since the approval of Bitcoin spot ETFs in January this year, Bitcoin is no longer seen as a niche asset but has risen to become a mainstream asset. With Trump's election victory further boosting its visibility, Bitcoin's growth potential can now be compared to other mainstream assets.

As is well known, Bitcoin is also referred to as digital gold. Currently, Bitcoin's market capitalization is about 9% of gold's. Below are several scenarios to estimate Bitcoin's potential future price:

• If Bitcoin's market capitalization reaches 25% of gold's, at $4.5 trillion, the price would reach $227,162.
• If Bitcoin's market capitalization matches NVIDIA's, the price would reach $183,645.
• If Bitcoin's market capitalization surpasses Google, reaching fifth place, the price would reach $111,730.

In terms of market capitalization, Bitcoin is expected to break into the top five global assets in this bull market, with a projected peak price range of $110,000 to $220,000.

Bitcoin Top Indicator: At Least $200,000

This indicator uses two data points for judgment:

• 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), it is a sell signal for Bitcoin.

How to interpret this indicator? It indicates whether the short-term price breaks above or falls below the average price of long-term holders, with the low point benchmark being the average price over the past two years. If it is below the green line, it indicates a drop below the recent two-year low, representing excessive panic, making it an excellent long-term buying opportunity.

The red line represents five times the average price over the past two years. Once breached, it indicates that the market is overly FOMO, often a sign of overheating, suitable for selling.

Reviewing Bitcoin's past price performance generally aligns with this pattern. According to the information in the chart below, on November 6, Bitcoin's price was approximately $75,000, while the red line price was $207,977. As Bitcoin's price continues to set new highs, the red line price will also rise. This indicator suggests that the peak price for this cycle is at least $200,000.

Pi Cycle Top Indicator: At Least $110,000

This indicator uses two sets of data to determine whether 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:

When the 111-day moving average rises and breaks above two times the 350-day moving average, it typically indicates that Bitcoin's price has reached a peak, serving as a sell signal.

How to interpret this indicator?

The Pi Cycle top indicator's meaning is to observe whether the short-term price breaks above the average price of long-term holders, thus assessing the market's overheating level. When the 111DMA (red line) breaks above the 350DMA x 2 (green line), it usually signifies excessive optimism in the market, leading to FOMO (fear of missing out) sentiment, often a sign of overheating, suitable for considering selling.

According to the latest chart information, on November 6, 2024, Bitcoin's price was approximately $75,621, while the price of 350DMA x 2 was about $117,390. This indicates that when Bitcoin's price approaches or exceeds this level, it may signal the peak of this market cycle.