Bitcoin hits $73.6K as fundamentals suggest new all-time highs are programmed
2024.10.29 17:48
Bitcoin (BTC) price sprinted toward its all-time high at $73,800, and this move differs from recent rallies as several fundamentals suggest that the bull market is shifting into a higher gear.
Here are six important pieces of data that signal Bitcoin is ready to hit new highs.
Bitcoin officially exits a seven-month-long downtrend
Bitcoin’s strong range break and sustained multiday close above the previous trading range inspired traders to open new positions with the intent of chasing higher targets in the $85,000–$160,000 range, a point well illustrated by veteran trader Peter Brandt.
B I T C O I N $BTC
The 5-month inverted expanding triangle has now been completed
Follow through will be important
The post halving advance may have begun
The series of lower highs and lower lows since March has come to an end pic.twitter.com/lth9fLv0yt— Peter Brandt (@PeterLBrandt) October 29, 2024
Bitcoin price broke through sell walls, liquidating most short traders
The longstanding wall of asks (the red rectangle in the candlestick chart) at $65,000 to $71,000 was cleared as Bitcoin stormed through $68,000 to $70,000, liquidating short traders and sending bears to their caves with empty pockets.
BTC/USDT chart showing sell walls and liquidation (bottom). Source: TRDR
Bitcoin exchange liquidation map. Source: CoinGlass
Crypto market 24-hour liquidations. Source: CoinGlass
Bitcoin dominance hits 60%
Bitcoin dominance, a dynamic ratio that denotes the market share of BTC in the total crypto market, moved to 60% on Oct. 29 for the first time since March 2021.
WELCOME HOME #BITCOIN DOMINANCE
It was a long journey, but BTC dominance finally made it to 60% pic.twitter.com/DsxU0OUuyu
— Benjamin Cowen (@intocryptoverse) October 29, 2024
Some traders view the Bitcoin dominance metric and the Crypto Fear & Greed Index as a gauge of investor sentiment. According to CoinGecko, “There can be an impending BTC bull run when Bitcoin’s dominance and price assume an upward trend.”
Related: Bitcoin trader sees all-time high ‘this week’ as BTC price nears $73K
Open interest rises to a new all-time high
On the run-up to the all-time high, Bitcoin open interest hit a new all-time high at $43.6 billion. This highlights market participants’ interest in BTC, and the ramp-up as the price hits new all-time highs can be interpreted as a positive investor sentiment indicator.
Bitcoin open interest. Source: CoinGlass
Contango, a juicy basis trade, and CME futures hitting new all-time highs
For the past two days, the Bitcoin market has been in contango, with futures prices leading the spot price; and on Oct. 29, Bitcoin hit a new all-time high at $74,485 in the CME futures.
Regarding the popularity of the basis trade in the futures market, HighStrike’s head of crypto options and derivatives analyst, JJ, told Cointelegraph:
“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.”
Bitcoin CME annualized basis. Source: Velodata
JJ elaborated by explaining:
“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.”
What is different about this move over $70k compared to prior attempts, is the market’s lack of ambition to buy OTM wings.
Despite the move higher in spot, the 10-delta fly has been trending lower — moving toward the lower end of the yearly range. In essence; the market isn’t… pic.twitter.com/MTH8qzYE6Z
— Jake O (@JO_wintermute) October 29, 2024
Traders bet on a Trump election victory and a crypto-friendly presidency
Bitcoin futures markets reflect a rapacious appetite for calls in the options market, a potential gamma squeeze and traders positioning for what they believe will be a Donald Trump election victory, followed by a crypto-friendly administration.
for every 1% move up between $71k and $85k, dealers need to hedge $15m. if we move up from $71k to $85k, dealers need to net buy $252m to hedge.
there are a number of ways for dealers to hedge if we move higher, but buying spot is probably the cheapest#bitcoin #gamma pic.twitter.com/CnBkeCYOsM
— Alex Thorn (@intangiblecoins) October 29, 2024
2024 US election odds. Source: Galaxy Research
Spot Bitcoin ETF inflows soar
Spot Bitcoin ETF flows. Source: Farside Investors
Inflows to the spot Bitcoin exchange-traded funds (ETFs) have soared over the past two weeks, with more than $3.8 billion entering the instruments during this time. The trend continued on Oct. 28, with Farside Investors data showing the ETFs taking in $479.4 million. To date, the total assets under management in the ETFs sit at $68.5 billion, and professional traders anticipate this figure to rise as options launch on the ETFs in the near future.
Total Spot Bitcoin ETF net inflow. Source: SoSoValue
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
