price record high
On November 9, Bitcoin hit a record high of more than $68,000, and its market value reached $1.27 trillion, surpassing Tesla and Meta (Facebook), and approaching the market value of silver ($1.37 trillion). The market capitalization ranking of Ethereum has also risen to 15th place, just behind Tencent.
On-chain indicators are bullish
As the price rises, the trend of investors accumulating Bitcoin does not seem to be slowing down - more and more BTC are being transferred to cold wallets, and the ratio of BTC balances to total circulation on centralized trading platforms has dropped to 12.9%. historical low.
Data shows that more than 5,000 BTC (approximately $350 million) were withdrawn from centralized trading platforms last week.
It is worth noting that wallet addresses with balances between 10,000 and 100,000 BTC, the so-called "Bitcoin whales", have been accelerating their buying. These entities have amassed 43,000 BTC over the past 5 days and about 92,000 BTC over the past 25 days.
In August 2020, the ratio of chips owned by long-term holders to the circulating supply reached a high of 80.6%, and then the ratio gradually decreased to 68% (distributed chips), until it rose to a stage top of $66,000 in April 2021. Recently, the ratio of long-term holders’ chips to the circulation has reached a new high of 81.5% again, and currently only spent 0.73% of the chips (they have not started to cash out a lot).
Bitcoin miners also continued to show firm determination and did not sell BTC in large quantities. As can be seen from the graph above, outflows from miner wallets have remained flat in recent weeks and months (much lower than in the first quarter of this year).
In May of this year, due to the domestic mining ban, Bitcoin's computing power was cut in half. After the migration of miners, in just a few months, Bitcoin computing power has almost returned to the level of May, which once again illustrates the resilience, robustness and decentralized nature of the Bitcoin network.
Stable macro environment
On the macro front, the “disconnect” between expectations and reality will widen with the release of U.S. consumer price index (CPI) data this week. Although the Fed has recently signaled that it will scale back its asset purchases, Mahjabeen Zaman, senior investment specialist at Citigroup, noted that the Fed could step up the pace of asset purchases due to upside risks to the CPI data. Some analysts also believe that the CPI itself is not a good measure of inflation because it excludes many assets that have seen the greatest increases in value and price. It’s also the biggest reason Bitcoin’s price remains strong — protecting the purchasing power of individual savers and cash-rich companies.
It is expected that in the future, more and more countries will follow El Salvador's policies and support the use and regulation of Bitcoin. Despite a flood of criticism from the public, the government of El Salvador remains steadfast in its support of Bitcoin legislation. El Salvador's President Nayib Bukele also recently said that the country's bitcoin proceeds will be used to build 20 schools and a hospital.
In fact, Africa is an excellent testing ground for cryptocurrencies, and many businesses are now launching goods and services suitable for different countries on the continent to fill the gap in cross-border payments between African countries and other countries. According to statistics, between July 2020 and June 2021, the cryptocurrency market in Africa has grown by more than 1,200%, with Kenya, South Africa, Nigeria, and Tanzania all seeing high penetration rates.
short-term emotional overheating
On November 9, Apple CEO Cook said in an interview that "personally holds some cryptocurrencies and has been interested in cryptocurrencies for some time." Cook said, "I think it makes sense to use it as part of a diversified investment portfolio," but Apple's products do not support cryptocurrency purchases, and Apple's funds will not be used to invest in cryptocurrencies. He also said that Apple is currently researching encryption technology, but this is not something we plan to do right away. When asked about NFTs, Cook said they were "fun" but "it will take a while to work in a way that suits mainstream people." What, everyone knows.)
Although the overall environment and long-term trends are relatively optimistic, on November 9, the short-term fear and greed index of the cryptocurrency market reached a high of 84, and the market sentiment was "extremely greedy", and the market immediately started a correction. At present, the fear and greed index has dropped to 75, a slight drop, and we still need to pay attention to short-term risks.
