Bitcoin’s price surge above $71,000 has investors excited as the cryptocurrency continues its rally for the fourth consecutive day, reaching its highest level since early June. This surge has also positively impacted altcoins, with Solana reclaiming $180 for the first time since late July. The bullish trend in Bitcoin is supported by the futures market rally, with open interest in Bitcoin futures hitting a new record high of over $42 billion. Buyers are increasingly dominant in the market, as reflected by a long/short ratio of over 1.1. This increased momentum in the futures market, combined with the bullish price rally, suggests that buyers are pushing for higher levels.
Despite the high prices, there have been massive inflows into Bitcoin spot ETFs, with over $479 million in net positive inflows recorded in a single day. This surpasses the total inflows since the ETFs were launched, which now stand at $22 billion. The next major test level for Bitcoin is the psychological level of $72,000, which could lead to a deep bearish trend if breached, potentially pushing the price below $60,000.
Investors are also keeping an eye on the upcoming US elections, with bets on the possibility of Republican nominee Donald Trump winning a second term. The lack of a substantial advantage for either candidate so far could result in sharp volatility in the markets, as reflected by the divergence in opinion polls. While Kamala Harris currently holds a slight advantage over Trump according to FiveThirtyEight, the outcome of the elections remains uncertain. This uncertainty, coupled with expectations of a slowdown in the US labor market in October compared to September, could cap gains for cryptocurrencies.
On the geopolitical front, markets are finding some comfort in the relative calm in the Middle East, with Israel refraining from targeting Iranian oil or nuclear facilities. Ceasefire negotiations in Gaza are also underway, which could help defuse the situation in the region. However, this narrative of calm may only last through the US election period, with the potential for more violent escalation afterward. Any significant shifts in the conflict could impact the global economy, affecting energy supply chains and potentially exacerbating concerns about upward inflation risks.
Overall, Bitcoin’s price surge is driven by a combination of factors, including the futures market rally, ETF inflows, and geopolitical developments. Investors are closely watching the market dynamics and the upcoming US elections for further direction on the cryptocurrency’s price movements.
