Bitcoin [BTC] was trading at $63,663 as of the latest update, marking an 8% increase over the past week. With the year-end approaching, there is much speculation surrounding the possibility of Bitcoin achieving a fresh all-time high.
10x Research, in its weekly analysis, has identified three critical factors that could propel Bitcoin to exceed $73,000 in the near future.
Firstly, the upcoming US presidential elections scheduled for November 5th could serve as a significant event that drives positive market momentum. Another potential trigger highlighted in the report is the anticipated distributions to FTX creditors, coinciding with a bullish market, which could contribute to Bitcoin’s upward trend. The report stated,
“FTX creditors are projected to disburse $16 billion to clients between December 2024 and March 2025, a scenario that the market is likely to anticipate. We foresee a flow of $5-8 billion returning back into the crypto sphere,”
Thirdly, the recent increase in funds by MicroStrategy for its Bitcoin purchases might lead to a surge in demand for Bitcoin.
Yet, amidst these projections, are there additional overarching factors and on-chain data supporting a potential bull run?
Declining Dollar Index
The US dollar index (DXY) has been on a downward trajectory, currently standing at 101 and hovering within the $100-$101 range since August.
The DXY indicates the strength of the US dollar against other major global currencies. A dip in this index signifies a weaker dollar, which often sparks positive sentiments towards Bitcoin.
Historically, Bitcoin tends to see gains when the DXY weakens. Therefore, if the index dips below 100, Bitcoin could emerge as an appealing hedge against inflation.
Bitcoin Exchange Inflows
According to data from CryptoQuant, Bitcoin exchange inflows remained limited over the weekend post a phase of significant profit-taking activities.
This decrease indicates that traders might be gaining confidence in Bitcoin’s rally and its potential to sustain values above $60,000.
Nevertheless, weekends typically witness reduced trading volumes. To confirm a slowdown in profit-taking, traders should monitor fluctuations in the flow data during the weekdays.
Moreover, the estimated Bitcoin leverage ratio has been climbing and presently stands at its highest level for the year.
An elevated leverage ratio often signifies a growing optimistic sentiment as traders enhance their margin positions on BTC. However, a surge in this metric could also signal forthcoming volatility.