Bitcoin continues its rally for the fourth consecutive day, hitting its highest level since early June, surpassing $71,500. This has supported the bullish trend in altcoins, with Solana reclaiming $180 for the first time since late July.
Bitcoin’s gains come amid further futures rally, with open interest of the world’s largest cryptocurrency futures hitting a new record high, and massive inflows into spot ETFs building despite the high prices.
According to CoinGlass, open interest in Bitcoin futures has reached over $42 billion, with buyers increasingly dominant, with a long/short ratio of over 1.1, which began on Saturday. This increased momentum in the futures market, coupled with the bullish price rally, may reflect buyers pushing for higher levels.
Even after the hard-fought $69,000 level was breached, Bitcoin spot ETFs reaped over $479 million in net positive inflows yesterday alone, exceeding the total inflows since the ETFs were launched at $22 billion.
The psychological level of $72,000 will remain the next major test level. Touching it has usually been followed by a deep bearish that could push Bitcoin below $60,000.
This all comes with bets on the possibility of Republican nominee Donald Trump winning a second term in the White House after the elections that will be held mid-next week. This is while there is no substantial advantage for either candidate over the other so far, which could leave markets vulnerable to sharp volatility amid the divergence in opinion polls. The average of the polls still shows Kamala Harris with a slight advantage over Trump by 1.4 percentage points, according to FiveThirtyEight.
Bitcoin’s moves also come ahead of a series of highly significant data releases for the US economy. Expectations are for the labor market to slow in October compared to September. Meanwhile, negative surprises that point to signs of weakness in the health of the economy could cap gains for cryptocurrencies, whose bull trend requires a heightened risk appetite to remain intact.
In addition, markets may take some comfort from the relative calm in the Middle East after Israel did not target Iranian oil or nuclear facilities, which could have escalated the regional war, in addition to the increasing talk of ceasefire negotiations in Gaza that could help defuse the war.
However, this narrative may only last through the US election period, which could be followed by more violent rounds of escalation that could directly impact the global economy through potential damage to energy supply chains from the region. While Bitcoin is sometimes affected by significant shifts in the conflict that could exacerbate concerns about the upward inflation risk.
