Bitcoin nears $100,000 once more as a favorable inflation report boosts risk-taking sentiment.
Wednesday saw Bitcoin continue to rise, trading just around $100,000 as investors’ appetite for risk was stoked by yet another positive inflation report.
According to Coin Metrics, the flagship cryptocurrency’s price increased by almost 3% to $99,444.43, extending its two-day gain to over 7%.
The Amazing Rise of Bitcoin nears During the Derivative Market Boom
One big reason Bitcoin’s price has gone up is because institutional demand continues to rise.. They’re putting a lot of money into Bitcoin, which makes it more trustworthy. For example, MicroStrategy has bought a lot of Bitcoin and made a good profit as its value has increased. The way the market works also helps. More people are accepting Bitcoin as a real type of investment. Since there’s only a limited amount of Bitcoin available and more people want it, the price keeps going up on the basic rule of supply and demand.
The rise in the price of Bitcoin is largely due to the futures market. Bitcoin’s Open Interest, a measure of the number of active contracts, has risen to $63 billion. Compared to 2021, when it exceeded $20 billion, this is a record level. Back then, Bitcoin’s price was at its highest, around $69,000.
In just three days, ETF flows surged to almost $2 billion.
ETF transfers have only risen in recent days, reaching around $2 billion between November 18 and 20. Since November 1, there have only been five days of withdrawals from Bitcoin ETFs and nine days of inflows.
Given the excitement around the Trump Presidency and his alleged pro-crypto position, the increase in ETF adoption is probably going to continue. It’s conceivable that the current Bitcoin boom is still going strong if ETF flows keep increasing.
Technical Evaluation of Bitcoin/USD
The technical outlook is challenging because there is no historical price action to base any analysis on, and as we discussed earlier in the article, there is a risk of swings due to the surge in the derivatives market. The RSI has been in overbought territory since Bitcoin broke $75k, which is another indication that even though the RSI is in overbought territory, there is no guarantee that a pullback will occur. As of right now, immediate support is at 95000, with a break lower eyeing a move toward 91804. Bitcoin (BTC/USD) is on a tear this week in particular, having traded just below the $90k handle on Monday.
Frequently Asked Questions
What impact does inflation have on Bitcoin?
Bitcoin’s inflation-hedging ability, as asserted by investors, is confirmed by its appreciation against inflation (or inflation expectation) shocks. Bitcoin prices, however, reject the safe-haven quality and instead fall in response to financial instability shocks, unlike gold.
Will the price of Bitcoin nears increase?
Daily Price Forecast for Bitcoin (BTC) for Today, Tomorrow, This Week, and the Next 30 Days. The value of Bitcoin is expected to rise by 5%, possibly reaching $94,782.39 by tomorrow, based on your price prediction input.
Conclusion
Bitcoin’s surge toward $100,000 highlights the interplay of institutional demand, market dynamics, and growing mainstream acceptance of cryptocurrencies. While technical indicators suggest the potential for volatility, the continued inflow into Bitcoin ETFs and robust demand from investors provide a strong foundation for its upward trajectory. As the cryptocurrency market evolves, Bitcoin remains a symbol of resilience and innovation, drawing global attention as it approaches a historic milestone.