New highs! Bitcoin once surged to $76,850.
After the US election vote counting ended, Bitcoin ($BTC) continued its strong trend, setting a new historical high again on the evening of November 7, once rising to the threshold of $76,850, approaching the $77,000 whole number.
(Cointelegraph) Analyst Big Smokey points out that the recent price rally is supported by many bullish factors, including continuous inflow of funds into Bitcoin spot ETFs, Bitcoin breaking a 7-month downtrend line, entering a new price range, and the election of several cryptocurrency-friendly lawmakers, all of which make institutional investors more willing to increase their allocation to Bitcoin.
Analysts reveal 6 indicators that are optimistic about Bitcoin's future.
Big Smokey further notes that there are currently six indicators showing that Bitcoin still has room for growth in the future:
CME Bitcoin futures trading volume hits new high: As of November 6, the trading volume of Bitcoin futures at the Chicago Mercantile Exchange (CME) reached $13.15 billion, setting a new historical high, with open interest also reaching 15,255 Bitcoin on the same day.
Institutional investors continue to increase their positions: CME data shows that institutional investors are preparing for further price increases. As of November 6, the open interest in Bitcoin options increased by $1.1 billion.
Strong inflow of funds into Bitcoin spot ETFs: Data from digital asset management firm CoinShares shows that in the week before the US election, Bitcoin institutional digital investment products saw inflows of $2.156 billion. The inflow of funds remained strong after the election, with Farside Investor data indicating that between November 6 and 7, Bitcoin spot ETFs collectively saw inflows of approximately $850 million.
Market confidence steadily rising: The open interest in Bitcoin continues to rise, coupled with the election of several cryptocurrency-friendly lawmakers, which injects confidence into the market.
Interest rate cut expectations boost the market: The stock and cryptocurrency markets have responded positively to continued interest rate cuts, a sentiment further strengthened after the Federal Reserve announced a 25 basis point cut last night.
Policy benefits: Since Trump had promised before the election to strategically reserve Bitcoin and support American Bitcoin mining, although it is uncertain whether all promises will be fulfilled, Trump's friendly attitude towards the cryptocurrency industry still helps to boost investor confidence.
Source: Velo Data - Significant increase in open interest for Bitcoin options at the Chicago Mercantile Exchange
JJ, head of the cryptocurrency derivatives exchange HighStrike, mentioned that the actual implied volatility expected in the options market before the US election was over 90%, but the actual volatility during the election period was not that high, causing the long-term implied volatility to drop to 50%.
JJ further points out that although Bitcoin has reached new highs and new demand has surged, the implied volatility of options is far below the over 80% level during the March highs, even lower than the 70% level during the July rebound. Therefore, buying longer-term call options still remains attractive.
Is Bitcoin likely to surge into this range in the short term?
Big Smokey states that from a technical analysis perspective, traders expect Bitcoin to rise to the range of $78,000 to $85,000, while a total order book structure with a depth of 2.5% shows a sell order in the range of $77,000 to $78,000, but there is almost no significant resistance before reaching $83,000.
In addition, the Fibonacci extension tool predicts that this upward trend could extend to $82,367, which is precisely the 161.8% Fibonacci retracement level. Therefore, if Bitcoin can successfully break through the $77,000 to $78,000 range, it is expected to look towards the range of $82,000 to $85,000 in the future.
Big Smokey also points out that during Bitcoin's process of hitting new highs, spot trading volume remained stable, perpetual contract funding rates declined, and the scale of liquidations was relatively small, indicating a relatively healthy market structure.
Source: TradingView - Bitcoin daily chart trend and Fibonacci retracement analysis
[Disclaimer] The market has risks, and investments should be made with caution. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investing based on this is at your own risk.
