Four major signals are all firing! Why do we say the encryption bull run is about to start?

The cryptocurrency market showed a strong rebound on November 27, with the price of Bitcoin rising to $91,345, about 14% higher than the low point of this month, while other major tokens such as Ethereum also increased. The Fear and Greed Index rebounded from a historic low of 8 to 18, and the number of open contracts in futures approached the bottom after several weeks of decline. Coupled with the Fed's dovish expectations and Wall Street institutions being optimistic about risk assets, four key factors point to a new bull run about to start.

Market Sentiment Hits Bottom and Historical Cycle Insights

The Fear and Greed Index, as a key indicator of market sentiment, has shown clear signals of a bottoming rebound. After falling to an extreme panic level of 8 on November 23, the index quickly rebounded to the fear zone at 18. Such severe fluctuations often indicate important turning points in market sentiment. Historical data shows that most crypto assets bull runs begin during periods of rampant panic sentiment, where investors who dare to position against the trend usually achieve excess returns.

(Source: CMC)

Looking back at the market performance in April this year, the black swan event triggered by Trump's announcement of implementing reciprocal tariff policies pushed the Fear and Greed Index down to a low of 17. However, after a brief panic, the market quickly recovered, with Bitcoin reaching an all-time high a month later. This case vividly demonstrates the investment wisdom of “being greedy when others are fearful” and provides valuable references for the current market environment. The extremity of sentiment indicators is often highly correlated with market bottom regions, offering savvy investors clear signals for contrarian operations.

From the perspective of behavioral finance, retail investors tend to panic sell in large quantities at market bottoms, while institutional investors view this as a good opportunity to accumulate positions. Although the Fear and Greed Index has rebounded somewhat, there is still a significant gap to the “Extreme Greed” range (usually above 80), which indicates that the repair of market sentiment has just begun, and there remains ample potential for further rises.

Wall Street's Optimistic Expectations and Their Connection to Risk Assets

The optimistic expectations of mainstream financial institutions for the stock market are spreading to the cryptocurrency sector. JPMorgan's private banking division has raised its S&P 500 index target in its latest report, predicting a 20% rise in the index by 2027. Meanwhile, Wall Street giants such as ING, Bank of America, Morgan Stanley, and Deutsche Bank have also expressed positive views on the stock market, and this consistent optimism usually signals an improvement in the overall environment for risk assets.

The correlation between the stock market and the Crypto Assets market has significantly strengthened in recent years, with both being categorized as risk asset classes. When traditional financial markets enter a bull run, some funds flow into the Crypto Assets market through allocation effects and wealth effects. Institutional investors often increase their allocation to stocks while also correspondingly raising the proportion of Crypto Assets in their portfolios, creating a linkage effect between the two markets.

From the perspective of capital flow, the optimistic attitude of Wall Street analysts towards the stock market will directly influence institutional investors' asset allocation decisions. As more traditional financial institutions incorporate Crypto Assets into their asset allocation, the positive sentiment in the stock market will naturally transmit to the Crypto Assets sector. Especially in the current context where the regulatory framework for the Crypto Assets market is becoming increasingly clear, the barriers for traditional capital to enter this market are gradually being eliminated.

Key Indicators of the Futures Market and Macroeconomic Environment

Change in Open Interest of Futures

• Historical peak: $225 billion (October 2025)
• Recent low: approaching bottom after several weeks of decline
• Historical Pattern: Rebound from $141 billion (December 2024) to $92 billion (March 2025)

Fed policy expectations

• December rate cut probability: 84% (Polymarket data)
• Current interest rate: 3.75%
• Potential target interest rate: 1% (if Kevin Hassett becomes Fed chairman)

Wall Street Institutional Perspectives

• JPMorgan: S&P 500 expected to rise 20% before 2027
• Multiple institutions are jointly bullish on risk assets
• The correlation between the stock market and Crypto Assets has increased.

The leverage reset in the futures market is nearing completion

The continuous decline of open interest in futures is often seen as an important part of the market deleveraging process. Over the past few weeks, open interest in cryptocurrency futures has experienced a significant drop, and this adjustment is now nearing its end. Historically, open interest tends to rebound strongly in conjunction with price increases after hitting a bottom, and the current market is at this critical turning point.

(Source: CoinGlass)

Data analysis shows that the open interest in cryptocurrency futures decreased from $141 billion in December 2024 to $92 billion in March 2025, followed by a strong rebound to over $225 billion in October, reaching a historical high. This cyclical fluctuation reflects changes in the leverage usage among market participants and closely interacts with price trends. The decline in open interest indicates that excessive leverage has been largely cleared, laying the foundation for a healthy market pump.

When the open interest in futures begins to rise again, it usually indicates that new funds are flowing into the market and investor confidence is gradually recovering. This process not only provides incremental liquidity to the market but may also trigger a chain reaction of short position closures, further pushing up prices. From a technical analysis perspective, divergence between open interest and price is often a precursor to a trend reversal, and the current market is closely monitoring the turning signals of this indicator.

Fed Policy Shift and Political Factors Influence

The impact of the monetary policy environment on the Crypto Assets market cannot be ignored, and the Fed's dovish turn is becoming an important driving force for the market. According to Polymarket forecast data, the probability of the Fed cutting interest rates at the December meeting has soared to 84%, and this expectation has already guided U.S. Treasury yields lower recently. Rate cuts typically lead to a decrease in the risk-free rate, enhancing the relative attractiveness of risk assets, which directly benefits cryptocurrencies.

Political factors have further strengthened expectations for monetary policy easing. The possibility of Trump nominating Kevin Hassett as the next Fed chair has significantly increased in recent days. Unlike the current chair Powell, Hassett's policy stance is highly aligned with Trump, openly advocating for the Fed to implement more substantial rate cuts. If he successfully takes the helm at the Fed, it is not impossible for interest rates to drop from the current 3.75% to 1%.

Historically, the Fed's loose monetary policy cycles often resonate with crypto assets bull runs. The bull run from 2020 to 2021 occurred against the backdrop of the Fed lowering interest rates to zero and implementing large-scale asset purchases. The current market seems to be preparing for a similar macro environment, with smart money beginning to position itself early. The expected improvement in dollar liquidity is gradually reflecting in crypto assets prices, and this trend may accelerate as the Fed's policy becomes clearer.

Market Outlook under Multiple Favorable Resonances

Four key factors—the restoration of market sentiment, institutional optimistic expectations, the bottoming out of the futures market, and the shift in monetary policy—are forming a powerful synergy that jointly drives the Crypto Assets market into a new bull run cycle. These factors are not isolated but reinforce and promote each other, creating one of the most favorable market environments in recent years. For investors, understanding the interaction of these driving factors is more important than analyzing each factor separately.

From a temporal perspective, the influences of different factors may vary. Market sentiment shifts and the bottoming of futures open interest often lead price rebounds, while Wall Street views and Fed policies provide medium to long-term support. The convergence of these factors across different time scales offers opportunities for short-term trading while laying the groundwork for long-term investment. Savvy investors should formulate corresponding strategies based on their own investment levels.

Risk factors also need to be monitored. Although the overall market environment is positive, geopolitical events, changes in regulatory policies, or macroeconomic data exceeding expectations could temporarily interrupt the bull run. However, based on the current multiple signals, the downside space in the market is relatively limited, while the potential for rise is more impressive. After several months of adjustment and consolidation, the crypto assets market seems to be ready to welcome a new round of pump.