Cryptocurrency market rebounds under RMB to USD background: Bitcoin breaks through 96,000 confirming a new direction

The global exchange rate market is experiencing significant changes. The Federal Reserve’s rate cut expectation for December has risen to 87%, and US Treasury bonds have surpassed $30 trillion for the first time. Meanwhile, the Bank of Japan plans to raise interest rates this month to a 28-year high. In this multi-layered liquidity environment, the renminbi is under short-term appreciation pressure due to the weakening dollar and the rebound in Chinese asset attractiveness. Market discussions are ongoing about whether it can break the 7.0 level. This shift in expectations for the renminbi to US dollar exchange rate is quietly rewriting the logic of global asset allocation.

The Power Game Between the US Dollar and the Renminbi: Reshaping Liquidity Patterns

US employment data presents conflicting signals. Last week, initial unemployment claims unexpectedly fell to 191,000, a new low since September last year, indicating resilience in the labor market; but the continued claims remain high at 1.94 million, reflecting structural difficulties for re-employment. Against this backdrop, market expectations for the Fed to cut interest rates by 25 basis points in December have risen to 87%.

More importantly, the Fed’s quantitative tightening policy has ended, and the market expects the earliest next January to start a monthly “reserve management purchase” plan of about $35 billion to replenish liquidity. Although officials emphasize that this is not a new round of quantitative easing, investors still see it as a dovish signal—meaning dollar liquidity is about to recover.

In contrast, the Bank of Japan plans to raise interest rates this month, possibly reaching a 28-year high. This further deepens the divergence in global central bank policies: the US dollar remains relatively loose, while other major currencies tighten, easing the pressure on the renminbi to appreciate.

Recently, the renminbi has benefited from a weaker dollar, the rebound in Chinese assets, and strong corporate foreign exchange demand, showing a significant upward trend. The mainstream view suggests a higher probability of the renminbi breaking the 7.0 level in the short term, but some analyses point out that even if it “breaks 7,” whether it can sustain above that level remains uncertain. The central bank may aim to maintain two-way fluctuations in the exchange rate. From the perspective of expectations for the renminbi to US dollar exchange rate, this change will directly impact cross-border capital allocation—when the renminbi’s appreciation expectation strengthens, the relative attractiveness of dollar assets (including crypto assets) declines; conversely, it rises.

Capital Competition in the Chip War Intensifies

In the AI sector, market competition is intensifying. Mooresoft, dubbed the “First Domestic GPU Stock,” saw its stock price surge 502% on its first day of listing on the STAR Market, with market capitalization once exceeding 300 billion yuan, reflecting high market expectations for domestic AI chip development. Mooresoft was founded by former NVIDIA core team members and plans to use nearly 8 billion yuan raised through IPO to accelerate the development of a new generation of AI training and inference chips.

Meanwhile, industry giant NVIDIA also faces fierce competition. Founder Jensen Huang said he feels “30 days away from bankruptcy” every day. To counter challenges from competitors like Google TPU, NVIDIA recently published a technical blog stating that its GB200 NVL72 system can improve the performance of top open-source AI models by up to 10 times. Major cloud service providers such as Amazon Web Services, Google Cloud, and Microsoft Azure are accelerating deployment of this system. Additionally, NVIDIA, with $60.6 billion in cash and short-term investments as of the end of October, has launched a series of large-scale strategic investments—investing $2 billion in chip design company Synopsys, and $10 billion in Anthropic—further consolidating its AI ecosystem layout. These capital movements essentially reflect the outflow of US dollar capital amid global tech competition.

Bitcoin at $96,000: Trend Reversal or Pullback Trap

Recently, Bitcoin faced resistance after reaching $93,500 and pulled back, raising concerns about its future trajectory. The latest data shows Bitcoin is currently priced at $89,140, down 12.80% from the beginning of the year. Analysts believe that Bitcoin needs to break through $96,000 to confirm a trend reversal, with resistance concentrated between $93,500 and $100,000.

On-chain data indicates that if Bitcoin cannot hold above $93,500, the market could further decline to $68,000. The current market structure is similar to the early bear market in Q1 2022; if it falls below the key support at $81,500, a deep correction may be triggered. Analyst CyrilXBT pointed out that if Bitcoin breaks through the $95,000 to $100,000 range, a new rally could begin; otherwise, it may fall into the low $70,000s. Technically, a bearish flag pattern points to a target of $68,150, and market liquidation data shows that about $3 billion in open short positions will be liquidated when Bitcoin hits $96,000, with over $7 billion in liquidation if it breaks above $100,000.

However, there are also strong bullish voices. Analyst Murad, who proposed the “Meme Super Cycle” theory, is bullish and believes this bull market could extend to 2026, with Bitcoin reaching $150,000 to $200,000. Ripple CEO Brad Garlinghouse predicts the price will reach $180,000 by the end of 2026. BlackRock CEO Larry Fink revealed that some sovereign wealth funds are gradually increasing their holdings as Bitcoin price falls from the $126,000 high to the $80,000 range, establishing long-term positions. CryptoQuant analyst Darkfost believes Bitcoin needs to recover the long-term holder cost basis of about $96,956 to restore market confidence. JPMorgan states that if market conditions remain stable, Bitcoin could rise to $170,000 within the next 6-12 months.

Underlying these forecasts is the logic: when global central banks’ liquidity remains loose and the renminbi’s appreciation/depreciation expectations are uncertain, crypto assets like Bitcoin, with their strong cross-border liquidity and independence from single exchange rates, tend to become capital choices for risk avoidance.

Ethereum Fusaka Upgrade and the New Chapter of Scalability

Ethereum recently broke through the key level of $3,200, with the latest price at $2,960, down 9.87% year-to-date. Analysts are generally optimistic about its future, believing that if the momentum continues, Ethereum could see a 20% increase, targeting $3,650 to $3,900.

On the trading front, analysts believe current momentum favors an upward move, with the top area possibly slightly above $3,300. Breaking through the $3,300–$3,400 range could extend to $3,800. Retail investors are actively accumulating below $2,700; if the price falls to $3,000, it could trigger $2 billion in liquidations, while reaching $3,300 could face $700 million in liquidation pressure.

More importantly, Ethereum has officially activated the Fusaka upgrade, reducing L2 gas fees by another 60%. Founder Vitalik emphasized that the PeerDAS technology introduced in Fusaka is a “truly sharded” solution and a milestone since 2015. Although there are still imperfections in L1 scalability, this lays a foundation for future blockchain development. From the macro perspective of RMB to USD transfer, the improved scalability of Ethereum means more efficient cross-border capital transfer, which is substantively beneficial for international asset allocation.

Capital Landscape: Institutional Continues Deployment, Retail Cautious Participation

Within 24 hours, global liquidation amounts reached $243 million, including $83.76 million in BTC, $73.61 million in ETH, and $7.38 million in XRP. This reflects divergent market views on price direction, with bulls and bears engaging in fierce confrontation.

The market fear and greed index stands at 28 (fear), indicating overall cautious sentiment. 24-hour trading volume for BTC is $12.5 billion, for ETH $7.029 billion, with overall market liquidity sufficient. BTC’s market share is 56.52%, ETH 11.32%, maintaining stability in their dominance.

Looking at institutional capital flows, recent Bitcoin and Ethereum ETFs have experienced net outflows. However, on-chain data shows that mainstream institutional investors have continued to increase holdings during price corrections. This “institutional accumulation at lows and retail panic” pattern has historically been a sign of bottoming rebounds.

It is worth noting that when the renminbi’s appreciation expectation strengthens and the dollar weakens, institutional capital is motivated to shift some dollar assets into high-yield crypto markets. This expectation of RMB to USD exchange rate has already been reflected in market segmentation.

Outlook: $96,000 as the Confirmation Level

Reviewing the current situation, the environment of loose global liquidity has become highly probable. The Fed’s rate cut is imminent, the Bank of Japan is raising rates, and the RMB’s appreciation/depreciation expectations are fluctuating—all pointing to a conclusion: the relative attractiveness of dollar assets is declining, while crypto assets, with their global liquidity characteristics, are poised to absorb more cross-border capital.

From the perspective of RMB to USD, if the renminbi breaks below 7.0 in the short term, the upside for the dollar will be limited, supporting dollar-denominated crypto assets. Conversely, if the RMB fluctuates in appreciation and depreciation, investors will tend to diversify their assets unaffected by exchange rate risks, with Bitcoin’s proportion potentially rising.

Technically, Bitcoin needs to break through $96,000 to confirm a trend reversal. Once broken, the market liquidation scale could exceed $7 billion, triggering a chain reaction. With Fusaka upgrade boosting Ethereum’s scalability, the upward channel is now open.

Overall, against the backdrop of intertwined RMB and USD movements and diverging global central bank policies, the crypto market has shifted from panic to watchfulness. Confirming a breakout above $96,000 for Bitcoin will signal the start of a new rally. At that point, Ethereum and other major cryptocurrencies are expected to follow upward.