Bitcoin has achieved a significant milestone, surpassing the $100,000 mark for the first time on Dec. 6, marking a historic moment in the cryptocurrency’s journey.
This remarkable rise comes despite lackluster performance across traditional markets. Over the past month, Bitcoin’s value climbed by 32%, contrasting sharply with declines in other key assets such as oil, which dropped 6.3%, the S&P 500, down 1%, and gold, which slipped by 1%.
A Bullish Phase to Continue Until Late 2025?
Analysts believe Bitcoin’s recent surge signals the onset of the “euphoria stage,” a phase often referenced in crypto trading circles. This phase is characterized by heightened market optimism and robust price growth, potentially setting the stage for the rally to persist into late 2025.
According to Quinten François, co-founder of WeRate, Bitcoin’s rally is supported by the long-term holder net unrealized profit/loss (NUPL) indicator. François shared his perspective on Dec. 7, stating:
“Bitcoin is entering the euphoria stage. You have a maximum of 12 months before the cycle top.”
The NUPL metric evaluates the network’s overall profitability by analyzing unrealized profits and losses among Bitcoin holders, offering insights into market sentiment and potential price trends.
Navigating Through Global Liquidity Challenges
Bitcoin’s new all-time high is particularly noteworthy given the current environment of tightening global liquidity. James Coutts, chief crypto analyst at Real Vision, commented on the achievement in a Dec. 6 social media post:
“Bitcoin has hit new ATHs in the face of a deteriorating liquidity backdrop. If conditions worsen, the rally, while euphoric, can only last for a limited time. If conditions ease from here, then a pullback is warranted, but then off we go again.”
Meanwhile, the global M2 liquidity index, which encompasses cash and short-term deposits, is nearing a potential bottom. This suggests that Bitcoin could continue its upward trajectory in the short term, with analysts predicting a local peak of over $110,000 by January 2025.
Raoul Pal, founder of Global Macro Investor, echoed this sentiment, emphasizing Bitcoin’s alignment with broader liquidity trends and its potential to reach even higher levels before the end of the cycle.
As the cryptocurrency market gains momentum, investors and analysts alike will be closely watching how Bitcoin navigates these critical phases in its evolution.
