Bitcoin came close to breaking through the $70,000 level on Monday as money flowed into exchange-traded funds (ETFs) for the largest digital asset, as well as optimism about regulatory action in the United States, supported sentiment.
The cryptocurrency rose 1% before paring gains to trade at $69,000 by 9 a.m. Riyadh time. Smaller coins such as Ethereum (Ether), ranked second by market cap, and Solana (Solana), which ranks in the top 10, also saw tight range-trading.
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Huge cash flows
Bitcoin spot exchange-traded funds in the United States attracted net inflows of about $2.4 billion in the six days to Oct. 18, data showed, driven by bets that U.S. regulations on cryptocurrencies will become friendlier after the Nov. 5 presidential election. Republican nominee Donald Trump is known for his support of cryptocurrencies, to the point that bitcoin is seen as a so-called “Trump trade.” His Democratic rival, Vice President Kamala Harris, has pledged to support a regulatory framework for the industry, in contrast to the market’s crackdown on the sector under the Biden administration.
According to David Lewant, head of research at major crypto broker FalconX, the two main drivers of the market are the election and the global economic environment. He explained that the Bitcoin options market indicates that “future implied volatility is highly concentrated around Election Day, and remains relatively low before and after.”
Bitcoin rose about 10% in the seven days through Sunday, the native cryptocurrency’s best weekly performance in more than a month. Demand for exchange-traded funds helped the coin reach a record high of $73,798 in March. The rally has since cooled, with bitcoin last trading above $70,000 in June.
Bitcoin Technical Indicators
Bitcoin's Moving Average Convergence Divergence (MACD) indicator has turned bullish, boosting the possibility of surpassing the $70,000 level.
The Moving Average Convergence Divergence (MACD), a technical analysis indicator used to measure trend strength and changes, has turned positive on the weekly chart for the first time since April. This signals a renewed shift in momentum to the upside, suggesting a positive resolution to Bitcoin’s prolonged trading period between $50,000 and $70,000.
The positive technical outlook is in line with the consensus that the US Federal Reserve’s renewed preference for lower interest rates, the increasing likelihood of crypto-friendly Republican candidate Donald Trump winning the US election on November 5, and the risk-averse Japanese yen’s weakness will likely push Bitcoin to at least $100,000 by the end of December.
This article is not investment advice.
