Macro crypto currency market outlook

Bitcoin has finally broken out to the topside, extending its run of record highs after ending a period of consolidation that had been in place from March through November of this year. This now puts the clear focus on a test of the massive barrier at $100k. Longer-term studies are however looking extended, which suggests any meaningful upside beyond $100k could be limited until these studies unwind from overbought readings. Any setbacks should be well supported into previous resistance in the $70k-$75k area.

Historical studies had been forecasting an impressive month of performance for crypto assets in November and those expectations weren’t let down. Bitcoin surged to a fresh record high in November, closing out the month just ahead of $100k, up 37%. Ether performance was even more impressive, with the second largest crypto asset finally breaking out of its own multi-month consolidation and racing higher to close out November up 47%.

When we consider the drivers behind the surge in crypto assets, we would highlight bullish seasonal trend analysis, the US election result, a technical breakout, the addition of ETF options products, and increased attention around MicroStrategy and El Salvador as the primary drivers for the latest run of strength. We believe all of these positive price catalysts set the stage for more mainstream adoption of crypto assets in the months ahead, particularly at a time when investors are pricing a clearer, warmer regulatory framework and crypto friendly incoming US administration.

Ether outperformance relative to bitcoin has been a notable update. Ether has been in an intense downtrend against bitcoin since 2021 and we are finally seeing potential signs this ratio could be bottoming out. This is an important development as it points to an uptick in demand for crypto assets beyond bitcoin. As per our mention of the warmer regulatory environment, this should be of benefit to the many projects on Ethereum and other blockchains where such regulatory clarity is needed.

Looking ahead, we expect crypto assets to be well supported on dips. December has been a positive month for bitcoin performance, and we believe the market will be wanting to finally take out that much talked about $100k barrier. At the same time, as per our technical insights, it is worth noting that longer-term studies are starting to look a little stretched, which could mean more consolidation to allow for these studies to unwind, before seeing that next big push to the topside.