As a researcher with years of experience studying cryptocurrency markets and having witnessed the volatility of Bitcoin firsthand, I can confidently say that the current surge in Bitcoin prices is not just another bubble but rather a significant shift in the market dynamics. The robust spot Bitcoin ETF inflows, the breakout from the 7-month downtrend, and the success of the US Republican party in the recent elections have all contributed to this trend.
On November 7th, Bitcoin maintained its streak of successive record-breaking daily prices, with the Bitcoin value trading over $76,800.
Signals such as strong inflows into a Bitcoin ETF, Bitcoin’s break from a 7-month price downtrend, and the Republican Party’s sweep in Congress, Senate, and Executive branches are encouraging many groups of institutional investors to increase their investment in Bitcoin.
Proof of this is seen in:
- CME BTC futures trading volume rose to a new all-time high at $13.15 billion on Nov. 6, and the CME notational open interest reached 15,255 BTC on the same day.
- Within the CME, what is clear is that institutional investors are positioning for further upside, and the Nov. 6 addition of $1.1 billion in open interest reflects this belief.
- Pre-election spot Bitcoin ETFs inflows in the billion dollar range, followed by strong flows post-election.
$BTC ETFs
Net Flows = +$622m
— #333kByJuly2025 (@CarpeNoctom) November 7, 2024
- The steady rise in Bitcoin’s open interest and the election of pro-crypto legislators across all the branches of the US government. *Equities and crypto markets responding positively to the expectation that benchmark interest rates will continue to drop, a point reinforced by the Nov. 7, 25 basis point rate cut decision from the US Federal Reserve.
- The increased likelihood of the US creating a Strategic Bitcoin Reserve and the expectation that the US Federal Reserve will cut rates at each upcoming FOMC is also boosting investor confidence and leading market participants to increase their allocation to equities and crypto assets.
Reflecting on the escalating transactions within CME Bitcoin futures and options markets, I, as an analyst, find myself intrigued by the recent surge. This insight is based on my discussions with our Head of Crypto Options and Derivatives at HighStrike, JJ.
“Ceaseless demand from Coinbase spot reflects increased appetite from US institutional investors following the Trump victory and the perceived removal of White House hostilities toward the industry. Additionally, following the lack of realized volatility during the election relative to the amount of volatility implied by the options market prior (90%+), we’re seeing longer-dated implied volatility levels settle and find what could be floor at the 50% region (BTC ATM IV chart in Velo) which is where they’ve spent most of the past 2 months consolidating.”
JJ added:
“This is likely making buying longer-dated call options attractive from an options perspective, as despite the move to new ATHs for BTC and the influx of new demand options IV is nowhere near the levels it reached at the previous ATH back in March when longer-dated IVs were well above 80%, or even during the July rally when they peaked around 70%.”
Short-term price expectations reside in the $82,000 to $85,000 range
According to technical analysis, traders seem to be predicting a surge towards the price range between $78,000 and $85,000. A closer look at the order book reveals a cluster of sell orders around $77,000 to $78,000, followed by an apparent gap up to $83,000 where there are currently fewer buy or sell orders.
Right now, the Fibonacci Extension forecast suggests that the price could rise to approximately $82,367, aligning with a 1.618 ratio.
In simpler terms, the total amount traded (aggregated spot volumes) has stayed roughly the same, while the interest rate for trading (funding rate) has decreased, and there haven’t been many significant sell-offs (liquidations) during this recent rally that reached new price peaks.
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2024-11-08 01:13