Trump Wins Again, Bitcoin Soars: $90,000 Target Emerges, But Margin Calls Warn of Risk

Trump Wins Again, Bitcoin Soars: $90,000 Target Emerges, But Margin Calls Warn of RiskFollowing Trump's victory, Bitcoin price briefly surged past $80,000 on the evening of November 10th, setting a new all-time high. It continued its ascent on November 11th, breaking through $81,000 in the morning and reaching $82,000 later that day, again establishing a new record

Trump Wins Again, Bitcoin Soars: $90,000 Target Emerges, But Margin Calls Warn of Risk

Following Trump's victory, Bitcoin price briefly surged past $80,000 on the evening of November 10th, setting a new all-time high. It continued its ascent on November 11th, breaking through $81,000 in the morning and reaching $82,000 later that day, again establishing a new record. Daily gains reached 3%, with an impressive 18% increase over the past seven days. Meanwhile, other cryptocurrencies like Ethereum, Dogecoin, and BNB also experienced significant upward momentum. Ethereum reclaimed the $3000 mark, trading at $3152 with a 28.3% rise over the past week. Dogecoin, long championed by Trump's "ally" Elon Musk, skyrocketed to $0.2807, exceeding 20% in a 24-hour span and an astonishing 86% rise in a week.

This cryptocurrency frenzy is widely attributed to the "Trump Trade," with the market anticipating Trump's continued support for the crypto industry. During his campaign, Trump repeatedly expressed his favor for Bitcoin and cryptocurrencies, aiming to connect with tech-savvy voters and the crypto community. He publicly declared his intention to make the US the "cryptocurrency capital of the Earth," advocating for reduced regulatory barriers and propelling America to become the global center for Bitcoin mining and crypto innovation. At the 2024 Bitcoin Conference, the largest annual gathering in the crypto industry, Trump proclaimed that if he returns to the White House, he would designate Bitcoin as a strategic reserve asset for the US. Yu Jaining, co-chair of the Blockchain Special Committee of the China Communications Industry Association and honorary chairman of the Hong Kong Blockchain Association, stated that such a policy shift grants Bitcoin a new status, significantly bolstering market confidence in its long-term value. As policies become more compliant in the future, institutional investors are increasingly drawn to Bitcoin and Bitcoin ETFs.

Trump's comprehensive victory is perceived by the market as the most favorable outcome for crypto assets. Many analysts hold strong expectations for Bitcoin's future trajectory. Some analysts posit that $90,000 will be the next target for Bitcoin, potentially achievable by the end of November. More optimistic views project Bitcoin reaching $125,000 by the end of the year and $200,000 by the end of 2025.

However, it's crucial to acknowledge that volatility remains the defining characteristic of Bitcoin's recent performance. In late October, Bitcoin had briefly surged to $74,000 before retracing in early November, dropping to $67,000 on November 4th. Subsequently, Bitcoin price mirrored the fluctuations in the US election, beginning its upward climb only after Trump officially declared his victory.

This surge in price has been accompanied by significant losses for numerous investors. Data from Coinglass reveals that over the past 24 hours, 213,800 investors experienced margin calls, amounting to a total of $645 million in losses. Of this sum, $633 million stemmed from long positions being liquidated, primarily due to margin calls on various altcoin contracts. Conversely, Bitcoin saw a greater number of short positions being liquidated. In terms of cryptocurrencies, Bitcoin, Ethereum, and Dogecoin (DOGE) incurred the highest margin call amounts over the past 24 hours, with figures of $122 million, $90.76 million, and $69.86 million, respectively. Notably, these three cryptocurrencies are currently experiencing active trading in the market.

Technically, the Bitcoin Fear & Greed Index stands at 76, indicating a market gripped by greed. This implies that as the market rises, individuals tend to exhibit greed and fear of missing out on potential gains. With Bitcoin breaking records, discussions have emerged regarding the sustainability of this bullish trend and whether Bitcoin can maintain its position above the $80,000 mark. Yu Jaining believes that, propelled by the strength of the bull market, Bitcoin price could challenge the psychological thresholds of $90,000 and even $100,000 within the coming months. However, these price targets depend on sustained policy support, continued institutional capital inflows, and a favorable global macroeconomic environment. As prices climb, market volatility will also increase, necessitating cautious behavior and a realistic assessment of personal risk tolerance from investors when chasing gains.

Yu Jaining highlights several factors that will determine the longevity of this Bitcoin rally. First, it hinges on whether optimistic market sentiment persists after Trump's policies are implemented, and whether these policies genuinely deliver tangible support to the industry. KiYoungJu, founder of CryptoQuant, argues that due to overheated Bitcoin futures market indicators, a market correction is anticipated. However, Bitcoin is currently entering a price discovery phase, with the market intensifying. Should a correction or consolidation phase occur, the bull market might endure. However, a strong year-end rally might set the stage for a bearish market in 2025.

On the other hand, this surge in price is primarily driven by market expectations of future policy benefits in the short term. If policy specifics fail to align with market expectations or prove less lenient than anticipated, it could trigger a market correction. While Trump has demonstrated notable support for digital assets during his campaign, the actual likelihood of policy implementation and its timeframe remain uncertain. This uncertainty stems from the divergent perspectives of the two major US political parties on digital assets, the complex political maneuvering involved in the legislative process, and the inherent challenges posed by the independence of financial regulatory agencies, which can lead to extended policy cycles.

"Investors need to recognize the double-edged sword effect of policy changes and be wary of the risk of market corrections stemming from excessive enthusiasm," advises Yu Jaining. Particularly in the digital asset market, excessive optimism can be accompanied by increased leveraged trading. Therefore, investors are urged to minimize leveraged operations during this period, adopt a diversified investment strategy, and implement stringent risk management measures.

In conclusion, while Trump's victory has injected considerable bullish momentum into Bitcoin, lifting market sentiment and potentially driving prices upward in the near term, investors should remain rational, be vigilant about market volatility, and be mindful of the risks posed by policy implementation and changing market sentiment.