As investors seek refuge in assets perceived as less risky with high growth potential, there has been a notable shift from conventional equities to Bitcoin [BTC].
Bitcoin’s recent surge to a record high of $77,000, reflecting a 10% increase on its weekly charts, can be attributed to escalating uncertainty surrounding fiscal policies under the Trump administration, particularly related to China tariffs and the surging national debt.
Furthermore, with the new government focusing on establishing the United States as a hub for cryptocurrency innovation, Bitcoin’s status as a safe haven asset is being reevaluated.
Institutional Giants Showing Confidence in Bitcoin’s Future
The limited supply of 21 million Bitcoins has led to a growing number of investors considering BTC as a reliable store of value. A recent report from financial intelligence firm River shed light on the ownership of Bitcoin among significant stakeholders.
This support is pivotal, especially as the derivative markets have undergone significant transformations since the previous presidential election, evident from the record-high Open Interest (OI) of $45 billion.
The escalating interest from institutional players provides a sense of stability in the long term, mitigating the impact of speculative fluctuations. In the past 24 hours, liquidations worth $36.28 million occurred, with short positions worth $25.20 million being closed.
Moreover, Bitcoin-based exchange-traded funds (ETFs) have witnessed unprecedented capital inflows immediately following the election outcomes, giving retail investors a solid foothold, interpreting the current price surge as a risky yet rewarding investment opportunity.
If this positive momentum persists, Bitcoin could potentially breach the $80,000 mark by the concluding trading days of November, underpinned by various bullish factors at play.
Anticipated Massive Liquidity Inflows, but…
Unlike previous market cycles where the dominance of Tether (USDT) in the market dipped before rebounding, the current trend shows a consistent decline in its market share. Despite Bitcoin entering a high-risk zone, the dominance of USDT has remained on a downward trajectory, hitting a daily low of 6% on the Election Day.
A diminishing USDT market share usually indicates Bitcoin nearing a bottom as investors reallocate stablecoins back into the cryptocurrency, perceiving the prevailing price as an attractive entry point.
Tether’s Treasury recently minted 1 billion USDT tokens given the prevailing market conditions, with Bitcoin gaining favor as a safer investment avenue.
While positive indicators abound, there are concerns that the market might be overheating. The Relative Strength Index (RSI) signals an overbought state, with 74% of the recent price movements being upward in the last fortnight.
Potential profit-taking by short-term holders could trigger a minor correction. However, the overall market sentiment remains optimistic for Bitcoin to attain the $80,000 milestone by the end of the month.
A critical factor supporting this upward trend is the mounting uncertainty surrounding ‘Trump trades,’ positioning Bitcoin as a more secure bet than conventional stocks, attracting institutional interest.
While a slight dip cannot be ruled out, the current bullish rally of Bitcoin seems poised to continue in the foreseeable future.