Crypto market capitalization: $2.95 trln (+7.6%)
Dominance: BTC – 58.9%, ETH – 13.6%
Fear and Greed Index: 86 (Extreme Greed) vs. 79 in the previous session
On Monday November 11, after taking out the $84,547 resistance we referenced yesterday, Bitcoin extended its rally to a new all-time high at $89,604. The Crypto King ended the day 10% higher and is up over 30% since the November 5 election day.
Other cryptocurrencies also pushed higher, with Ethereum consolidating above $3k. ETH gained nearly 5% over the past 24 hours and is up a whopping 38% on the week. Other notable outperformers include Solana (SOL) and Dogecoin (DOGE). SOL is up over 37% WoW, while DOGE has rocketed 126%.
As we can see, Trump trade continues to drive the bull run even as the euphoria shows no signs of abating. The President-elect’s pro-Bitcoin stance has persuaded many BTC investors that the industry will see a far more BTC-friendly regulatory environment, alongside expectations that Donald Trump will build up a reserve crypto fund and turn the US into a crypto powerhouse on the world stage. Trump is a major stakeholder in the crypto industry, with a crypto portfolio of over $6 mln. Furthermore, back in September he announced the launch of his own crypto venture, World Liberty Financial. This means that the 45th and 47th US president has a personal, vested interest in the crypto business. This is a complete flip from his first term, when Trump called crypto a scam illegally competing with the dollar.
The incoming president has also pledged to remove SEC Chair Gary Gensler, who has taken a hostile approach to crypto and wielded enforcement action as a regulatory tool against the industry. The appointment of a new team of officials is a crucial issue that will shape the future of the cryptocurrency business as the heads of the SEC and other agencies will be working alongside lawmakers in framing legislation that can make BTC and other leading cryptocurrencies part of the mainstream investment business. These appointments also have vast implications for the global economy as epitomized by the 2022 collapse of FTX, while Binance, Coinbase, Kraken and Ripple have faced litigation and relentless regulatory pressure spearheaded by the Biden administration.
The names currently under review for the new SEC chair and other key positions include Daniel Gallagher, a former SEC official now at the financial technology firm Robinhood, Hester Peirce and Mark Uyeda, both Republican commissioners who are now employed at the SEC. A Republican donor, Gallagher vocally criticized the SEC for taking a “scorched earth” approach to crypto. Peirce and Uyeda, meanwhile, have criticized their agency for policy and enforcement actions taken under President Joe Biden. In our opinion, Peirce could be named as interim chair of the SEC, once Trump takes over the White House, and he might later lead a federal task force on crypto policy. “The commission’s war on crypto must end, including crypto enforcement actions solely based on a failure to register with no allegation of fraud or harm,” Uyeda stated in the run-up to the election. “President Trump and the American electorate have sent a clear message. Starting in 2025, the SEC’s role is to carry out that mandate.” All that being said, we still believe it remains unclear whether Trump can or will actually fire Gensler, or alternatively demote him to a commissioner, while placing a new leader in charge of the agency.
There is also plenty of upbeat news on the ETF front. Spot bitcoin ETFs generated $1.6 bln in inflows during US election week, although this trend was offset by $657.9 mln in outflows on Monday and Tuesday, as per data from Farside Investors. BlackRock's iShares Bitcoin Trust ETF (IBIT) was the top performer last week, with a total of $1.25 billion in inflows. Since their launch in January, spot bitcoin ETFs have reached $25.86 bln in total inflows. IBIT is again the leader, with $27.4 bln in inflows. The Fidelity Wise Origin BTC ETF (FBTC) ranks second, with $10.76 bln in inflows. IBIT and the other ETFs have rallied about 30.5% so far this year.
Technical analysis
Technically, BTC has been in a strong bull run in recent months. A golden cross pattern shaped up as the 50-day and 200-day Weighted Moving Averages crossed each other. After breaching the recent resistance levels, Bitcoin has formed an inverse head and shoulders pattern – one of the most bullish market signals. Since the $88,800 resistance level has been breached, the next strong resistance line lies at $92,500. Alternatively, in case of a downturn, support lies and $88k and then $84k. We reiterate our YE2024 target of $100k, although given the pace of the rally, we think a consolidation or correction could be in the cards as the “Trump honeymoon” effect starts to fade.