SUMMARY
- Bitfinex analysts indicate that upcoming elections, positive technical indicators, and heightened derivatives positioning could lead to a favorable price outlook for bitcoin.
- They also warn that markets may experience short-term volatility after the election as they respond to the results and possible changes in macroeconomic conditions.
Bitcoin’s price surged from $69,000 to above $71,900 in late Tuesday trading, reflecting rising trader optimism ahead of the upcoming U.S. elections. Analysts attribute this positive momentum to progressed technical indicators, reestablished inflows into spot bitcoin ETFs, and broader macroeconomic variables. Speculation around a potential Trump election triumph and the seasonal strength of Q4 also contribute to this upward trajectory. Bitfinex analysts portray the current circumstance as a “perfect storm” for Bitcoin, highlighting the energy despite expected price volatility amid the election period.
On Monday, U.S. spot bitcoin ETFs experienced noteworthy inflows, totaling $479.35 million, stamping the most noteworthy daily influx in two weeks. BlackRock’s IBIT led these inflows with $315.19 million, amplifying its positive stream streak to 11 days. Other notable ETFs, such as Ark and 21Shares’ ARKB and Fidelity’s FBTC, saw inflows of $59.78 million and $44.12 million, individually. The total daily trading volume for these ETFs increased to $3 billion, a rise from $2.9 billion recorded the previous Friday.
Bitcoin’s network metrics demonstrate a recent 4% rise in mining difficulty, with an additional 6% increment anticipated. These alterations highlight the competitive scene for miners but moreover emphasize the network’s security and general market wellbeing. According to Blockware Insights, the expanding difficulty can put pressure on miner profitability but is eventually a positive sign for Bitcoin’s sustainability. As of presently, bitcoin is trading around $71,400, reflecting a 4% increase over the past 24 hours.
The options market also signals a bullish viewpoint, with call options showing that Bitcoin’s price may surpass $80,000 by the end of the year. Bitfinex analysts noted a developing interest in December 27 call options at this price point, proposing confidence in a post-election rally. In any case, they cautioned that elevated market volatility suggests conceivable price changes around the election date. Premiums on options set to expire amid election week have risen, demonstrating expected short-term turbulence in the market.
QCP Capital detailed increased volatility connected to election week options, with implied volatility outperforming 60%. Whereas demand for call options has mellowed as Bitcoin stabilizes above $70,000, a high open interest in perpetual contracts signals solid bullish positioning for potential gains. Recent price developments have brought about short liquidations totaling over $179 million across the cryptocurrency market, with bitcoin shorts accounting for $80 million of this total, according to CoinGlass information.