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Recently, the crypto market has seen a new wave of price surges, with mainstream cryptos like BTC, ETH, SOL, and DOGE all registering significant increases. In addition, there are numerous wealth-creation stories in the memecoin sector. What exactly is behind this market upswing? Apart from the Federal Reserve’s policy shifts, Donald Trump’s reelection as U.S. President and statements from prominent figures like Elon Musk have also fueled this market momentum. This article will analyze the price increases of mainstream cryptos and the forces propelling them by taking into account the market performance.
A Blistering Market Rally: Has a Bull Market Officially Begun?
1. Bitcoin (BTC)
As the leading crypto in the market, Bitcoin has performed impressively in this cycle, with its price surpassing several critical thresholds, shoring up overall market sentiment. On November 13, according to HTX data, Bitcoin surpassed the $90,000 mark for the first time, setting a new record high at $93,200.
Bitcoin’s surge is inseparable from the return of institutional investors. In particular, Trump’s reelection as the U.S. president has boosted market confidence. With expectations for Trump’s “decentralization” and “free-market” policies, investors have a greater demand for Bitcoin, which is regarded as digital gold.
2. Ethereum (ETH)
As the second-largest crypto asset by market cap, Ethereum has also experienced a sharp price increase in this cycle. On November 12, data from 8marketcap showed that Ethereum’s market cap rose to around $400.07 billion, surpassing Procter & Gamble and ranking 32nd globally in terms of market cap.
A key factor behind ETH’s growth is its expanding ecosystem and technical strengths, especially the ongoing implementation of Layer 2 scaling solutions, which have significantly improved transaction speeds and reduced costs. In addition, Ethereum’s staking mechanism and growing application cases for DeFi and NFTs have contributed to its steady price appreciation.
3. Solana (SOL)
On November 10, as revealed by DeFiLlama data, Solana’s on-chain DEX transactions totaled $14.533 billion over the past week, overtaking Ethereum’s on-chain DEX transaction volume of $13.779 billion. Solana, which has delivered a strong performance recently, has been actively committed to areas such as DeFi, NFTs, and GameFi and has attracted a large base of users and developers.
As a high-speed, low-cost public blockchain, Solana has gradually become the top choice for various applications. With the market confidence in the Solana ecosystem, coupled with continued support from major exchanges, SOL’s price has soared in this cycle, with a 7-day increase of 27.83%, pushing its price back up to around $210 and making it a standout performer.
4. Dogecoin (DOGE)
As a crypto with strong community involvement, Dogecoin’s surge also deserves attention. On November 12, HTX data indicated that DOGE broke the $0.40 mark with a 24-hour increase of over 45.52%. Its current market cap is $60.3 billion, placing it fifth among cryptos by market cap (excluding stablecoins).
DOGE’s price is often heavily influenced by social media and celebrity remarks. In particular, tweets from Tesla founder Elon Musk have once again ignited market enthusiasm. Musk has not only frequently mentioned Dogecoin in public but has even hinted that Tesla might support DOGE payments, generating substantial interest around the token. Endorsed by Musk, DOGE’s price has surged dramatically in the short term, demonstrating its strong appeal in the market.
Analysis of the Reasons Behind the Full-Fledged Crypto Boom
Impact of the Macroeconomic Environment
Global economic uncertainties and mounted inflationary pressures have driven investors to seek broader safe-haven assets, diverting investors’ attention back to the crypto market. Against the backdrop of Trump’s reelection and heightened policy uncertainty, crypto assets have become an option for investors to hedge risks. Fluctuations in the dollar’s exchange rate and shifts in international capital flows have lent further support to the crypto market.
Changes in Federal Reserve’s Crypto Policies
The Federal Reserve has recently adjusted its policy stance on cryptocurrency, emphasizing the need to allow room for innovation while ensuring proper regulation. This attitude has boosted market confidence, motivating institutional and retail investors to enter the market. This relatively relaxed policy stance suggests that the Fed may delay imposing stringent regulatory measures on the crypto industry and leave more space for market growth.
Technological Advancements and Ecosystem Development
Technological innovations on mainstream public blockchains like Ethereum 2.0 and Solana have been key pillars supporting this market momentum. The implementation of Ethereum’s Layer 2 scaling solutions has optimized network performance, lowered transaction fees, and invigorated the DeFi ecosystem. Solana’s technical features have contributed to its rapid growth in the NFT and GameFi sectors. This diverse ecosystem has attracted numerous developers, fostering a virtuous cycle and fuelling market enthusiasm.
Social Media and Celebrity Influence
A distinctive feature of the crypto market is the influence of communities and social media, especially celebrities’ direct impact on market sentiment. Elon Musk’s ongoing support for DOGE on social media has put DOGE at the center of market attention, attracting related investors. Furthermore, Trump calls for a “free market” as he returns to politics, which resonates well with the decentralization concept. This, along with the Fed’s relatively relaxed regulatory stance, has driven up market enthusiasm as well as Bitcoin’s price.
This surge in the crypto market is not just the result of capital inflows, but rather a product of the interplay between technological innovation, changes in the macroeconomic environment, institutional positioning and the celebrity effect. After this round of sharp rise, the market may face profit-taking pressures in the short term. Key assets like Bitcoin and Ethereum may fluctuate in the short run after breaking critical price levels. As the market gradually regains rationality, prices may adjust around recent highs, so investors should be cautious of a potential short-term pullback.
Note: This paper should not be considered as investment advice.
