30s Summary

Bitcoin recorded a 16% increase from 11-13 November, breaking the $93K mark for the first time. Noting that some Bitcoin miners cashed in on 12 November, Julio Moreno of CryptoQuant predicted a potential slowdown. Cryptocurrency sentiment remains high, with four key metrics indicating continued confidence. Despite fears the strong US dollar could negatively impact Bitcoin, its standing as a distinct asset has been recognized with the launch of a $54bn spot Bitcoin ETF. The Bitcoin futures premium highlighted a bullish trajectory while the skew indicator suggests a steady, balanced market. Future price boosts could stem from a potential rise in US Treasury Bitcoin reserves.

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Bitcoin (BTC) enjoyed a nice 16% jump between Nov. 11 and Nov. 13, even breaking $93,000 for the first time. Despite hitting new heights, some market-watchers think that the upswing might slow down as some folks – including certain Bitcoin miners – start cashing in.

Julio Moreno, a whizz at research centre CryptoQuant, pointed out that some Bitcoin miners started making money off their bitcoins on Nov. 12. This was especially noticeable among folks sitting on 100 BTC or more, though it stayed within normal levels.

But confidence in Bitcoin’s climb remains high, backed by four important metrics that include data from derivatives and the outlook for the US dollar.

Why do we care about US Treasury yields, though? Well, when these go up, it means people want more return on these guaranteed-income assets. Essentially, they think inflation or government spending will go up, both of which lessen the worth of Treasury holdings. So, a rise in yields means people have less trust in the US economy.

Some claim that the US dollar getting stronger compared to major currencies like the euro, yen, and Swiss franc might bring down Bitcoin’s price. But that connection isn’t as strong anymore.

Bitcoin’s already gained some standing as a distinct asset thanks to the launch of a $54 billion spot Bitcoin exchange-traded fund (ETF). As for the strong US dollar, its relationship with the stock market’s performance is more direct. This performance has little connection with Bitcoin’s price, as it is tied more closely to investors’ belief in the strength of the US economy and the hope for hefty corporate earnings.

Hints about Bitcoin’s bullish momentum can be seen in the Bitcoin futures premium. This measures how the price of Bitcoin’s monthly derivatives are different from regular markets. It’s used to gauge when traders are overly optimistic. If everything’s normal, there should be a 5% to 10% annualized premium to account for the longer settlement period. The current 13% premium tells us that big players and arbitrage desks are getting pumped, which is a good sign given Bitcoin’s record high on Nov. 13.

If traders expect Bitcoin’s price to drop, the cost of protective put options goes up and we see the skew indicator go above 6%. When there’s overconfidence, the skew dips below -6%. Current data shows a steady, balanced market despite the 16% rally in less than three days.

Unless US Treasury yields drop significantly, investors will likely keep looking for other scarce assets, like Bitcoin. This means market conditions are in Bitcoin’s favor. Even if the Trump administration tries to cut spending, changes can only happen if they’re approved by lawmakers.

As it stands, the road ahead looks promising for more Bitcoin price increases. With a crypto-friendly US administration and a Republican majority in Congress, along with a steady-to-positive sentiment in Bitcoin derivatives markets, prices could continue to rise. Further boosts could come from unexpected directions, like Senator Cynthia Lummis’s proposal to bump up US Treasury Bitcoin reserves, which could easily push Bitcoin’s price above $100,000.

This write-up is just to put ideas out there and not meant to be professional advice. All the thoughts and opinions put forth are just the author’s and don’t necessarily show the views and opinions of Cointelegraph.