Orange attracts Orange.
Compass 144
“All of a sudden your industry went through the roof.”
- Donald Trump, referencing his impact crypto at the 2024 Nashville Bitcoin Conference
Sweet Euphoria.
Let’s take a moment to remember and reflect: two years ago, the FTX exchange, one of the largest by trading volume at the time, imploded following a liquidity crisis involving its native token, FTT, which was linked to Alameda Research—the investment arm of companies led by Sam Bankman-Fried.
It played out like a movie script, involving CZ, the CEO of Binance, who cut the strings holding up the exchange by publicly announcing the selling of Binance’s FTT holdings. He initially came to FTX’s aid with a buyout offer if he could examine its books, but that didn’t happen, and the exchange ultimately collapsed, leaving its customers with losses exceeding $8 billion. That week, Bitcoin dipped more than 20% and hit a low of $15.5k.
If you, as a reader, analyst, investor, or trader, went through all of this, you deserve everything that’s happening now. Every time Bitcoin reaches a new all-time high, it’s more than just a breath of relief. Every scar is a victory.
Now, with Donald Trump’s victory, making him potentially the most powerful U.S. president since the Reagan era, the next step is to see if the Bitcoin Act will flourish—a plan to create a strategic Bitcoin reserve asset to help counter the nearly $36 trillion national debt, involving the purchase of 1 million BTC over five years.
Additionally, following the election results, most pro-crypto legislators who were funded by the crypto industry won their races. This points toward a shift in the legal framework that could favor crypto and Bitcoin adoption. Cities like Detroit are already getting ahead of this trend.
This is just the beginning. Yet, all these elements are not the reason Bitcoin is reaching these levels: Bitcoin is fundamentally the same as it was two years ago when it was trading at $15.5k.
Meanwhile, Bitcoin’s price momentum is fully bullish, naturally in a Bitcoin season, with zero risk and strong fundamentals—Bitcoin is in “Saiyan mode.”
In this weekend Compass we identify two possible scenarios for BTC’s next move, and by the weekly start playbook coming Monday we will see if one of the scenarios has gained weight.
More than a Feeling.
Bitcoin has reached new highs, but has market sentiment followed suit? The weekly average still indicates a "greed" sentiment, though not yet reaching euphoria—somewhat surprising after a week like this.
Taking a closer look, we see a similar reading, with no extreme greed levels, yet sentiment has returned to April levels, marking a seven-month high. This sentiment is simmering slowly but steadily heating up.
Additionally, we observe that Google searches for Bitcoin have emerged from a lull, surpassing August levels and reaching pre-halving levels, though still halfway to the yearly highs. Could this signal a reawakening of retail interest? This may also be reflected in the positioning of short-term holders, as we’ll see next.
Change the Game Board.
Yes, Bitcoin has reached a new all-time high, but how are market participants positioning themselves? We see long-term holders starting to exit their positions, while short-term holders are entering the market with strength. (Recall that this relationship was previously reversed.) Miners are maintaining a neutral position, with slight distribution from whales and a noticeable outflow of BTC from exchanges. Let’s break down these positions.
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