Originally published on: November 06, 2024
In a surprising turn of events, Bitcoin surged by 10.5% to reach a new all-time high of $75,350 following former President Donald Trump’s victory in the 2024 presidential election. While the market has seen some price fluctuations recently, there are strong indicators that suggest further upside potential for BTC.
One key metric to consider is the premium on Bitcoin futures compared to spot markets, which has risen to 12%, indicating a positive sentiment and lack of excessive leverage in the market. This signals a healthy foundation for gains above $75,000 and reflects a moderate level of skepticism despite BTC’s new high and expectations of increased institutional adoption under a Trump administration.
Insights from the Bitcoin options markets and growing institutional interest point towards continued growth in the market. However, traders remain cautious due to past price volatility and upcoming economic events, such as the US Federal Open Market Committee decision on interest rates and remarks from Federal Reserve Chair Jerome Powell.
While investors are hopeful for a rate cut, there are concerns that traditional markets may benefit more under a Trump presidency with potential tariff policies and tax changes. Additionally, if the administration successfully implements budget cuts and improves the US fiscal debt situation, the need for alternative hedge instruments like gold and Bitcoin may decrease, impacting demand in the long term.
Despite these uncertainties, Bitcoin derivatives currently show a bullish setup, suggesting that the market may need some time to adjust to the new price levels. The recent neutral options skew and optimistic futures market indicate a positive outlook for BTC in the near future.
In the broader economic context, the rise in the US five-year yield raises questions about sustaining economic growth without significant changes in monetary policy, potentially leading to increased stimulus that could benefit Bitcoin’s price.
For more insights on the market trends and investment opportunities, subscribe to the Markets Outlook newsletter for critical information on trading strategies and risk mitigation. Stay informed to make informed decisions in the ever-changing financial landscape.
