As a seasoned analyst with over two decades of experience in the financial markets, I can confidently say that we are witnessing a monumental shift in the crypto landscape. The confluence of factors pointing towards Bitcoin’s bullish trend is reminiscent of the dot-com boom I observed in the late 90s, but with the added excitement and unpredictability that only cryptocurrencies can provide.
The cost of Bitcoin (BTC) surged closer to its record peak of $73,800, marking a distinct change from past surges since various underlying factors indicate that the bull market might be gearing up for an even more powerful advance.
Here are six important pieces of data that signal Bitcoin is ready to hit new highs.
Bitcoin officially exits a 7-month-long downtrend
The significant surge and continuous closing above its previous trading range for several days has led Bitcoin enthusiasts to initiate fresh trades with the goal of reaching higher prices, potentially between $85,000 and $160,000, a notion that veteran trader Peter Brandt effectively demonstrates.
Bitcoin’s 5-month Inverted Ascending Triangle Pattern has now been fully formed
— Peter Brandt (@PeterLBrandt) October 29, 2024
Bitcoin price broke through sell walls, liquidating most short traders
For some time now, a significant resistance level (red rectangle in the candlestick chart) between $65,000 and $71,000 has been present for Bitcoin. However, as Bitcoin surged past $68,000 to $70,000, it managed to breach this long-standing barrier, leading to the elimination of short traders and leaving bears with no profits.
Bitcoin dominance hits 60%
The proportion of the Bitcoin market within the overall cryptocurrency market, known as Bitcoin dominance, reached 60% for the first time since March last year, on October 29th.
WELCOME HOME #BITCOIN DOMINANCE
It was a long journey, but BTC dominance finally made it to 60%
— Benjamin Cowen (@intocryptoverse) October 29, 2024
Some investors consider the Bitcoin dominance rate and the Crypto Fear & Greed Index as indicators of market sentiment. As stated by CoinGecko, a potential Bitcoin bull market could be on the horizon when both the dominance and price of Bitcoin show an increasing trend.
Open interest rises to a new all-time high
As Bitcoin approaches its record-breaking peak, its open interest has reached an unprecedented high of $43.6 billion. This shows that market players are increasingly interested in BTC, and the escalating surge when prices hit new records can be seen as a strong sign of optimistic investor sentiment.
Contango, a juicy basis trade, and CME futures hitting new all-time highs.
Over the last two days, the Bitcoin market has followed a pattern where future prices have been higher than the current spot price. On October 29th, Bitcoin achieved a brand-new record high of $74,485 in the CME futures market.
Concerning the surge in interest for cryptocurrency-based trades within the futures market, HighStrike’s chief analyst for crypto options and derivatives, JJ, shared his insights with CryptoMoon.
“Essentially, what happened is you had tons of people cash and carry by longing the IBIT/spot ETFs and shorting the CME futures, but very few, if any, people were directionally long CME futures. You can see this in how the CME basis dropped from 16% in February (when many were directionally long into the all-time high breakout) to just 8.75% now.”
JJ elaborated by explaining that:
“What’s happening now is you have hedges closing in preparation for price discovery and those funds with no BTC exposure using the CME to hedge their non-exposure by going speculatively long into the election. The net result is CME basis poised to breakout higher than 10% into the end of the year.”
The key distinction in this $70k move from previous efforts lies in the market’s reluctance to purchase Out-the-Money (OTM) call options wings. Conversely, despite an upward shift in the spot price, the 10-delta fly has been declining – approaching the lower boundary of the annual range. In summary, the market seems uninterested…
— Jake O (@JO_wintermute) October 29, 2024
Traders bet on a Trump election victory and a crypto-friendly presidency
As a researcher, I’ve noticed an intense demand for call options in the Bitcoin futures markets, which could lead to a gamma squeeze. This pattern suggests that traders are strategically positioning themselves, anticipating a surge in Bitcoin price if a Trump election victory materializes and a crypto-friendly administration follows.
If the bitcoin price increases by 1%, from $71,000 to $85,000, dealers will need to purchase an additional $252 million in bitcoin to effectively hedge their positions. This is equivalent to needing to hedge $15 million for each 1% increase in price. There are several methods for dealers to hedge when the price rises, but buying spot Bitcoin might be the most cost-effective option. #bitcoin #gamma
— Alex Thorn (@intangiblecoins) October 29, 2024
Spot Bitcoin ETF inflows soar
Over the last fortnight, there’s been a significant increase in investments into Bitcoin Spot ETFs, totaling approximately $3.8 billion. On October 28th alone, these funds took in an additional $479.4 million, according to Farside Investors data. Currently, the combined assets managed by these ETFs stand at around $68.5 billion. Experienced traders predict that this amount will grow further as options become available for trading on these ETFs soon.
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2024-10-30 00:11