Bitcoin price’s impressive surge past $75,000 has sparked widespread anticipation that BTC could hit new highs this month, potentially reaching $80,000. A combination of favorable factors, including bullish sentiment in the futures market, growing interest in Bitcoin ETFs, and expectations of a Federal Reserve rate cut, are all contributing to this optimistic outlook.
1. Bullish Sentiment in the Futures Market
The futures market is showing strong signs that Bitcoin’s rally is just beginning. According to Vetle Lunde, head of research at K33 Research, the market saw an immediate shift toward risk-on trades following Donald Trump’s election victory.
The outcome has resulted in significant growth in Bitcoin futures trading volumes, with the Chicago Mercantile Exchange (CME) basis, the difference between spot and futures prices, surging from 7% to over 15%. This surge reflects a broader institutional interest, particularly from US-based investors.
“CME’s basis has surged from 7% yesterday to highs above 15% today, while perps have moved from trading below the spot market to its largest premiums to the spot market since March,” Lunde noted, according to a Bloomberg report. This shift suggests that investors are increasingly confident in Bitcoin price’s long-term upward potential.
Moreover, perpetual futures contracts, which cater to offshore traders, have also seen a rise in demand, with higher funding rates indicating a growing appetite for leverage. These developments point to a strong momentum that could push Bitcoin to new price levels in the coming weeks.
2. Growing Interest in Bitcoin ETFs
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Another factor fueling Bitcoin’s rally is the renewed interest in exchange-traded funds (ETFs) linked to the cryptocurrency. Despite a significant outflow on Monday, traders are expecting a reversal in ETF flows, with a potential surge during US trading hours on Wednesday. According to Lunde, the outlook for Bitcoin ETFs remains positive, with the cryptocurrency finding support at its former all-time highs.
“BTC seems to find support at former all-time highs, a welcoming signal for further momentum to the upside,” said Lunde. He added that the combination of rising CME premiums and post-election clarity provides an ideal backdrop for strong ETF flows, which could further drive Bitcoin’s price upward.
Spot Bitcoin ETF products have become an increasingly popular investment tool for institutional players seeking exposure to the digital asset without directly holding BTC. As these products gain traction, Bitcoin’s price is expected to continue benefiting from heightened demand and institutional backing.
3. Fed Rate Cut Expectations
A third catalyst supporting the Bitcoin rally is the anticipated Federal Reserve rate cut on Thursday, November 7, which is expected to lower interest rates by 0.25%. Analysts believe that a rate cut could encourage more risk-taking, with investors looking for higher returns in assets like Bitcoin.
Meanwhile, Michael Safai, founding partner of Dexterity Capital, explained that a Trump presidency could result in more favorable policies for cryptocurrencies. “Trump brings the promise of decreased regulatory intervention in the US, which crypto investors have been howling for the past few years,” Safai said. Thus, if the Fed lowers interest rates, Bitcoin could benefit from renewed capital inflows, further solidifying the digital asset’s potential for growth.
Caution Amid the Bullish Outlook
While there is considerable optimism about Bitcoin’s future price movements, traders remain cautious about the potential for price corrections. Past market cycles have seen sharp liquidations following periods of rapid growth, particularly after the launch of Bitcoin ETFs in March.
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“We expect the overall trend for the next few quarters to go higher, but would be cautious for a correction at those levels due to profit-taking,” stated Nathanaël Cohen, co-founder of the INDIGO Fund. Nonetheless, the market remains optimistic on BTC price’s future trajectory.
Also Read: Whales Buy Bitcoin as Trump Wins US Elections; BTC Price Sustains $73k Level
