Bitcoin (BTC) surged 10.5% from November 5 to November 6, reaching a new all-time high of $75,350 after former US President Donald Trump won the 2024 presidential election.
Despite recent price fluctuations, the market shows solid foundations supporting continued growth. Bitcoin derivatives highlight a significant improvement in sentiment and the absence of excessive leverage, which is essential for profits above $75,000.
Annual premium for Bitcoin 2-month futures. Source: Levitas
Bitcoin futures premium over the spot market rose to 12%, exceeding the neutral range of 5-10%. Despite this improvement, market data reflects a moderate level of skepticism, especially considering BTC’s new highs and President Trump’s expected benefits to institutional adoption.
Additional insights from the Bitcoin options market and increased interest from institutional investors have laid the foundation for further gains. However, it is important to understand why traders remain cautious despite positive price momentum and expectations of a more favorable regulatory environment.
Bitcoin’s past strength has taken a hit and US monetary policy may change.
Investor caution may be due in part to six consecutive months in which the price has failed to stay above $72,000, leading to skepticism from traders. In addition, the U.S. Federal Open Market Committee’s interest rate decision scheduled for November 7 and the subsequent remarks by Federal Reserve Chairman Jerome Powell are adding to uncertainty.
With the majority consensus hoping for a 0.25% interest rate cut, Bitcoin traders are concerned that traditional stock markets will fall, especially as Trump hints at a nationalist agenda that includes a “blanket 20% tariff on all imports” and “punitive taxes.” They are concerned that more profits could be made. About American companies sending jobs overseas,” according to Time magazine.
More importantly, if the Trump administration successfully implements budget cuts and significantly improves the U.S. fiscal debt trajectory, the need for alternative hedges such as gold and Bitcoin may decrease. Therefore, in the long run, the election results may have a mixed effect on Bitcoin demand.
To determine whether Bitcoin whales and market makers think the recent rally may be unsustainable, one must examine the BTC options market. Under neutral conditions, an option’s 25% delta skew should ideally be balanced between call (buy) and put (sell) options, typically in the range of -7% to +7%.
Deribit’s Bitcoin 1-month options skew, put call. Source: Levitas
After briefly showing bullish signals, BTC options skewness returned to a neutral 6% on November 6. This is consistent with moderate optimism in the Bitcoin futures market and the absence of excessive leverage, favoring further upward momentum.
relevant: Top Polymarket whales profited $20 million from Trump victory.
Bitcoin derivatives are currently bullish, so the market may need days or weeks for traders to adjust to new price levels.
US 5-year Treasury yield (left) and BTC/USD (blue). Source: TradingView
In a broader context, the rise in the US 5-year yield to 4.28% is more significant, raising questions about whether US economic growth can be sustained without a substantial increase in the M2 money supply, which would imply a significant change in monetary policy. do.
These data reveal skepticism about the Fed’s ability to achieve a soft landing and suggest that widespread stimulus may be needed to avoid a recession, which is especially bullish for the price of Bitcoin.
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.