Author: Ciaran Lyons, CoinTelegraph; Compiler: Tao Zhu, Golden Finance
While Bitcoin hit a record high this week, it does not show any signs of being "overheated," with some analysts pointing to fundamentals indicating that Bitcoin could rise further.
"From a fundamental perspective, the market does not look overheated," said Alex Thorn, head of research at Galaxy, in a report on November 10.
Aurelie Barthere, an analyst at cryptocurrency analysis firm Nansen, shared a similar view. "Bitcoin's breakout to a new all-time high and huge volume are clear signs of continued positive momentum after the election," Barthere said in a market report on November 7.
Barthere added that traders have been rushing to "re-risk, which is reflected in the recent upward trend in cryptocurrencies," after Donald Trump won the U.S. presidential election on November 5.
Thorn noted that while future Bitcoin open interest (OI) — a metric that tracks the total number of unsettled Bitcoin derivatives contracts such as options and futures — has “inched higher to a new yearly high, funding rates have remained largely unchanged.”
As of Nov. 8, Bitcoin open interest stood at $46.6 billion. Source: CoinGlass
The high volume of Bitcoin OI sometimes raises concerns among market participants about increased volatility in Bitcoin
Nevertheless, positive funding rates suggest that traders are optimistic about Bitcoin’s price and that buyers are willing to pay sellers to hold positions.
As previously reported, Bitcoin OI reached $45.4 billion on Nov. 6, up 13.3% from Nov. 5.
At the time of this article’s publication, Bitcoin’s funding rate on Binance, the world’s largest cryptocurrency exchange, was 0.0100%, according to CoinGlass.
Galaxy’s Thorn expects Bitcoin and other cryptocurrencies to trade “significantly above today’s all-time highs over the next 12-18 months.”
From a technical analysis perspective, traders appear to be anticipating a move higher into the $78,000 to $85,000 range for Bitcoin.
According to data from TradingView, Bitcoin is trading at $75,776 at press time.
In a Nov. 7 post, cryptocurrency trader Matthew Hyland said Bitcoin is “consolidating” its previous all-time high of $73,679 and “looks for continuation.”
Meanwhile, the Federal Reserve cut interest rates by a further 25 basis points. This event was largely anticipated by market participants since the Fed’s first rate cut in September.
Rate cuts are bullish for crypto assets as traditional assets such as bonds and time deposits become less profitable for investors.
The rate cuts are bullish for crypto assets as traditional assets such as bonds and time deposits become less profitable for investors.
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