Matrixport Investment Research: Short-term overbought, strong capital inflows boost Bitcoins rise

After seven months of consolidation, BTC spot ETFs have seen an extraordinary inflow of funds. Starting with the 50 basis point rate cut in mid-September, Federal Reserve Chairman Powell assured the market that the rate cut cycle would be extended, which further accelerated the inflow of funds into BTC spot ETFs.

BTC鈥檚 strong momentum is expected to continue into December, driven by rising prices and increased media attention, attracting new investors. Optimism also surrounds Trump鈥檚 inauguration on January 20, 2025, which could bring a more favorable regulatory environment for 暗号currencies, including the appointment of a new SEC chairman. In addition, expectations of FTX鈥檚 upcoming announcement of a $16.5 billion return to creditors may also support market sentiment. These factors create a favorable backdrop for continued bullish sentiment and BTC price stability.

By 2025, crypto assets will cross the 8% penetration threshold, which will be a major turning point and lay the foundation for greater adoption.

Among the factors that have driven BTC to new highs this quarter, three major changes in the US regulatory field are the most important. First, on December 6, SP Global may announce the inclusion of MicroStrategy in the SP 500 index, prompting index funds to enter the market. Second, on December 10, Microsoft will review a proposal to invest in BTC despite the opposition of the board of directors.

Previously, the National Center for Public Policy Research submitted a proposal based on the 2025 Plan suggesting that BTC be evaluated as an investment target. Finally, starting from December 15, 2024, the Financial Accounting Standards Board (FASB) will introduce new regulations to allow crypto assets to be included in company financial reports at fair market value, which will encourage financial departments to include BTC in their balance sheets.

Historically, when BTCs relative strength index (RSI) reaches overbought levels or the 30-day rolling return rate exceeds 40% +, its price tends to consolidate as momentum cools. But given the recent overbought phenomenon, a short consolidation phase may occur. However, many positive factors are gradually emerging.

Looking at Bitcoins current momentum from the 7-day rolling price change rate (based on USD), as BTC prices rise, the absolute difference in price increases, but the recent 7-day price increase of $19,265, a record high, also shows that this is an unprecedented rebound in strength.

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