Bitcoin (BTC) surged 16% from November 11 to November 13, surpassing $93,000 for the first time. Despite these all-time highs, some traders believe the bullish momentum may be weakening as sellers, including certain Bitcoin miners, begin to take profits.
Julio Moreno, head of research at CryptoQuant, noted that while some Bitcoin miners began making profits on November 12, this activity remained at normal levels. This trend became evident when we examined monopolies holding more than 100 BTC.
However, four key indicators suggest that Bitcoin’s rally remains robust. This includes derivatives data and US dollar forecasts.
US 5-year Treasury yield (left) and Bitcoin/USD (right). Source: TradingView
Rising U.S. Treasury yields are a sign that investors are demanding higher returns on these bonds. Essentially, this indicates that holders expect either rising inflation or increased government spending, both of which would dilute the value of their Treasury holdings. In any case, the rise in yields reflects declining confidence in the U.S. financial situation.
Some investors argue that the recent strength of the U.S. dollar against other major currencies such as the euro, yen, and Swiss franc could have a negative impact on the price of Bitcoin. However, this inverse relationship is no longer relevant.
The launch of a $54 billion physical Bitcoin exchange-traded fund (ETF) further solidifies Bitcoin as a store of value.
US Dollar Index (DXY, left) and S&P 500 futures (right). Source: TradingView
Compared to other global currencies, the strength of the US dollar is more directly correlated with stock market performance, which is only loosely correlated with the price of Bitcoin. This dynamic comes as investors see the U.S. economy as better positioned compared to other major economies, leading to expectations about corporate earnings.
Bitcoin derivatives hint at further bullish momentum
Annual premium for Bitcoin 2-month futures. Source: Laevitas.ch
Bitcoin futures premiums, which measure the difference between monthly derivatives prices and the regular spot market, serve as an important indicator when traders are overly optimistic. In a neutral market, a premium of 5-10% per year is expected to compensate for the longer settlement period. The current 13% premium indicates some excitement on the part of whales and arbitrage desks, which is a healthy sign given Bitcoin’s all-time high on November 13th.
Deribit’s Bitcoin 1-month options skew (put call). Source: Laevitas.ch
When professional traders anticipate an imminent Bitcoin price correction, the cost of hedging through protective put options increases, causing the skew indicator to exceed 6%. In contrast, a period of overconfidence can push Bitcoin skewness below -6%. Recent BTC options data indicates a healthy, neutral market despite a 16% rally in less than three days.
relevant: $100,000 in Bitcoin? 9 analysts share their year-end BTC price predictions.
Unless U.S. Treasury yields decline significantly, investors will likely continue to look for alternative scarce assets such as Bitcoin, suggesting that macroeconomic conditions remain favorable. Despite the new Trump administration’s proposals to cut government spending, little can be done in the short term because most changes require legislative approval.
Given the cryptocurrency-friendly U.S. administration with Republican majorities in both houses of Congress, along with the neutral-bullish sentiment in the Bitcoin derivatives market, the path for BTC prices to rise further looks promising. Other potential catalysts, such as Senator Cynthia Lummis’ proposal to increase the U.S. Treasury’s Bitcoin holdings, could easily push the BTC price above $100,000.
This article is written for general information purposes and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.