Bitcoin price metrics forecast rally to $100K and above — Here’s why
2024.11.13 14:09
Bitcoin (BTC) surged by 16% from Nov. 11 to Nov. 13, surpassing the $93,000 mark for the first time. Despite this record high, some traders believe the bullish momentum could weaken as sellers, including certain Bitcoin miners, start to take profits.
Julio Moreno, head of research at CryptoQuant, noted that some Bitcoin miners began taking profits on Nov. 12, although this activity remained within normal levels. The trend became apparent upon examining exclusive entities holding 100 BTC or more.
However, four key metrics suggest that Bitcoin’s rally remains robust. These include derivatives data and the outlook for the US dollar.
US 5-year Treasury yield (left) vs. Bitcoin/USD (right). Source: TradingView
When US Treasury yields rise, it signals that investors are demanding higher returns on these fixed-income securities. Essentially, this indicates that holders anticipate either rising inflation or an increase in government spending, both of which dilute the value of Treasury holdings. In any case, the uptick in yields reflects reduced confidence in the US fiscal position.
Some investors contend that the recent strengthening of the US dollar against other major currencies—such as the euro, yen, and Swiss franc—could negatively impact Bitcoin’s price. However, this inverse relationship is no longer as relevant.
The launch of a $54 billion spot Bitcoin exchange-traded fund (ETF) has further established Bitcoin as a distinct store of value.
US Dollar Index (DXY, left) vs. S&P 500 futures (right). Source: TradingView
A strong US dollar relative to other global currencies is more directly correlated with stock market performance, which itself only loosely correlates with Bitcoin’s price. This dynamic occurs as investors view the US economy as better positioned than other major economies, leading to expectations for strong corporate earnings.
Bitcoin derivatives hint at further bullish momentum
Bitcoin 2-month futures annualized premium. Source: Laevitas.ch
The Bitcoin futures premium, which measures the difference between monthly derivatives prices and regular spot markets, serves as an important indicator when traders are overly optimistic. In neutral markets, a 5% to 10% annualized premium is expected to compensate for the longer settlement period. The current 13% premium indicates that whales and arbitrage desks are moderately excited, a healthy sign given Bitcoin’s all-time high on Nov. 13.
Bitcoin 1-month options skew (put-call) at Deribit. Source: Laevitas.ch
When professional traders anticipate an imminent Bitcoin price correction, the cost of hedging with protective put options rises, causing the skew indicator to exceed 6%. In contrast, periods of overconfidence can push the Bitcoin skew below -6%. Recent BTC options data indicate a healthy, neutral market despite a 16% rally in less than three days.
Related: $100K Bitcoin? 9 analysts share their end-of-year BTC price predictions
Unless there is a significant decline in US Treasury yields, investors are likely to continue seeking alternative scarce assets, such as Bitcoin, suggesting that macroeconomic conditions remain favorable. Despite proposals from the new Trump administration to cut government spending, there is little that can be done in the short term, as most changes require legislative approval.
The path for further BTC price gains appears promising, given the crypto-friendly US administration, with a Republican majority in both houses of Congress, alongside a neutral-to-bullish sentiment in Bitcoin derivatives markets. Other potential catalysts, such as Senator Cynthia Lummis’s proposal to increase US Treasury Bitcoin reserves, could easily propel the BTC price above $100,000.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
