23 Nov 2024

• Bitcoin continued its rally this week and rose to within touching distance of the 100K landmark level on Friday.
• Bitcoin spot ETFs saw an inflow totaling $2.84 billion until Thursday, while ETF options trading was also launched.
• Standard Chartered’s analyst expects Bitcoin to hit $125K by the end of the year, fueled by expectations of positive regulatory changes in the United States.
• Bitcoin (BTC) has achieved a new all-time high of $99,419, coming remarkably close to the $100,000 threshold, and has experienced a surge of over 9% this week. This upward trend has been bolstered by the increasing inflow into Bitcoin spot Exchange Traded Funds (ETFs), which has surpassed $2.8 billion as of Thursday. The recent introduction of Bitcoin ETF options by BlackRock and Grayscale has further contributed to this week's rally.
  
  Additionally, Geoff Kendrick, the Global Head of Digital Assets Research at Standard Chartered, shared with FXStreet his forecast that Bitcoin will reach $125,000 by the end of this year and $200,000 by the conclusion of 2025.
  
  On Friday, Bitcoin's price peaked at $99,419, just slightly above 0.5% from the coveted $100,000 mark. As reported by CoinMarketCap, Bitcoin is increasingly being acknowledged as a legitimate asset class, now ranking as the seventh-largest asset globally with a market capitalization of $1.94 trillion. This growing acceptance is drawing in new investors, including those who have previously not engaged with Bitcoin.
  
  Kendrick noted that the recent surge can be attributed to Donald Trump's victory in the presidential race and the Republicans' sweeping success. He anticipates that this political shift will lead to favorable regulatory changes shortly after Trump assumes office on January 20.
  
  While Kendrick acknowledged the possibility of a market pullback before the year's end, he emphasized that any corrections would likely be mitigated by the robust ETF inflows observed recently. He remarked, "When something rises by 30%, pullbacks can occur as markets may become overly optimistic. However, the ETFs are likely to purchase during any dips, which should help stabilize the market against significant sell-offs."
  
  Institutional demand for Bitcoin has also played a crucial role in supporting its price throughout the week, as indicated by Coinglass data.
• The current rally is being significantly driven by the accumulation of Bitcoin by large investors. According to Lookonchain data, these investors have amassed a total of 2,895 BTC, valued at $282.5 million, across nine distinct wallets on Thursday. Additionally, other large investors have acquired 3,289 BTC, amounting to $302 million, from Binance during the course of this week.
  
  Furthermore, Data Nerd reports that another large investor acquired 1,109 BTC, valued at $104.39 million, from both Binance and Coinbase exchanges on Wednesday. This investor now holds a total of 2,219 BTC, worth $212.41 million, indicating a robust demand for Bitcoin.
• QCP's report from Thursday underscores a robust demand for call options set for March and June, indicative of an increasing long-term bullish outlook driven by optimism regarding Bitcoin's expanding corporate adoption and rising capital inflows into the cryptocurrency market.
  
  The report further noted: "MicroStrategy is anticipated to raise $2.6 billion for additional Bitcoin purchases, with MSTR exceeding a $100 billion market capitalization and leading in U.S. trading volume. Numerous corporate treasuries are emulating MicroStrategy by incorporating Bitcoin into their reserves, with Acurx Pharmaceuticals reportedly acquiring up to $1 million in Bitcoin."
  
  "As we observe sustained demand for BTC alongside a continued easing of monetary policy by global central banks, BTC prices are likely to remain buoyant as we near the year's end," stated QCP's analyst.
  
  The Bitcoin derivatives market also contributed to the rally this week. The professional-grade cryptocurrency derivatives platform Deribit indicates that three out of seven BTC futures contracts are trading above $100,000. Contracts set to expire on March 28, 2025, are trading at $103,772, representing a nearly 5% premium over the average spot price of $98,800. This pricing reflects investors' confidence that the spot price will remain significantly above $100,000 through the end of March and beyond.

• In addition to the futures market, the recent launch of the Bitcoin ETF options  supports the ongoing rallyfollowed by. This market response will likely attract new investor cohorts and enable diversified trading strategies, which could help reduce volatility and downside risk, solidifying Bitcoin’s place in mainstream markets. Other BTC spot ETFs, such as the Fidelity Wise Origin Bitcoin Fund (FBTC), are expected to have options listed soon, according to digital assets firm QCP Capital.

  How high can Bitcoin go?

  Bitcoin’s weekly chart shows that the biggest crypto asset by market capitalization reached a new all-time high of $99,419 on Friday and is currently trading above $98,700. If BTC continues its upward momentum, it could extend the rally to retest the significant psychological level of $100,000. 

  Bitcoin could enter a price discovery mode, with Fibonacci extension levels projecting potential targets at $102,077 and $122,524, based on its Fibonacci extension levels of 161.8% and 200%, respectively (drawn from November 2021 high of $69,000 to November 2022 low of $15,476), provided bullish momentum remains strong.

  However, the weekly chart’s Relative Strength Index (RSI) momentum indicator stands at 77, signaling overbought conditions and suggesting an increasing risk of a correction. Traders should exercise caution when adding to their long positions, as the RSI’s move out of the overbought territory could provide a clear sign of a pullback.

  If Bitcoin faces a pullback, it could decline to retest its key psychological level of $90,000.