Bitcoin price metrics align to project further upside for BTC

Bitcoin (BTC) surged by 10.5% to hit a new all-time high at $75,350 from Nov. 5 to Nov. 6 following former US President Donald Trump’s win in the 2024 election. 

Despite the recent price fluctuations, the market is demonstrating a strong foundation that supports continued growth. Bitcoin derivatives highlight the robust improvement in sentiment and the absence of excessive leverage, which are essential for gains above $75,000. 

The premium on Bitcoin futures compared to spot markets rose to 12%, surpassing the neutral range of 5% to 10%. Despite this improvement, market data reflects a moderate level of skepticism, especially considering BTC’s new high and the anticipated benefits of a Trump presidency on institutional adoption.

Further insights from the Bitcoin options markets and increased institutional investor interest lay the groundwork for additional gains. However, it’s crucial to understand why traders remain cautious despite positive price momentum and the expectation of a more favorable regulatory environment.

Bitcoin bulls were hurt in the past, and the US monetary policy could shift

Investors’ caution can be partly attributed to the six consecutive months where prices failed to hold above $72,000, leading to trader skepticism. Additionally, the upcoming US Federal Open Market Committee (FOMC) decision on interest rates on Nov. 7, followed by remarks from Federal Reserve Chair Jerome Powell, adds to the uncertainty.

With a majority consensus expecting a 0.25% rate cut, Bitcoin traders fear that traditional stock markets might benefit more, especially as Trump hints at a nationalist agenda, including a “20% across-the-board tariff on all imports” and “punitive tax on U.S. companies that ship jobs overseas,” according to Time magazine.

More critically, if the Trump administration successfully implements budget cuts and significantly improves the US fiscal debt trajectory, this might reduce the need for alternative hedge instruments like gold and Bitcoin. Thus, in the long term, the election results could have a mixed impact on demand for Bitcoin.

To gauge whether Bitcoin whales and market makers believe the recent rally might not be sustainable, one should examine the BTC options markets. Under neutral conditions, the options 25% delta skew should ideally balance between call (buy) and put (sell) options, typically within -7% to +7%.

After briefly showing bullish signals, the BTC options skew returned to a neutral 6% on Nov. 6, aligning with the Bitcoin futures market’s moderate optimism and absence of excessive leverage, which is beneficial for further upward momentum.

Related: Top Polymarket whale profits $20M from Trump victory

Bitcoin derivatives currently indicate a bullish setup, so the market might just need a few days or weeks for traders to adjust to the new price levels. 

In the broader context, the rise of the US 5-year yield to 4.28% is more important, casting doubts about sustaining US economic growth without a substantial increase in the M2 money supply, meaning a significant change in the monetary policy.

Such data reveals skepticism about the Federal Reserve’s ability to navigate a soft landing, suggesting that avoiding a recession could require expansive stimulus, which is particularly bullish for Bitcoin’s price.