Outside Source
As Bitcoin spikes to $85,000, could Federal Reserve cuts and Trump’s pro-crypto agenda drive it toward $420,000? What do experts say about Bitcoin’s future in this market?
Table of Contents
Bitcoin reaches a new all-time high
On Nov. 11, Bitcoin (BTC) surpassed the $80,000 mark, reaching a new all-time high of nearly $85,000 after a nearly 25% surge within a week.
Bitcoin’ gigantic rally aligns with recent monetary policy adjustments from the Federal Reserve, which reduced interest rates by 25 basis points in its November meeting, following a 50 bps cut in September, bringing U.S. interest rates into the 4.5-4.75% range.
Lower interest rates generally translate to cheaper borrowing costs, potentially freeing up capital and encouraging investment, often benefiting risk assets like Bitcoin.
Adding to the current bullish sentiment, the recent U.S. presidential election returned former President Donald Trump—known for his favorable stance on crypto—to office, further fueling market optimism.
Despite this momentum, early November was marked by investor caution. Between Nov. 1 and Nov. 5, spot Bitcoin ETFs experienced outflows totaling nearly $715 million, screaming uncertainty around the election outcome.
Following the election results, however, market confidence surged, leading to renewed inflows into Bitcoin ETFs. According to CoinGlass data, from Nov. 6 to Nov. 8, these funds collectively accumulated over $2.28 billion in assets under management.
Meanwhile, Bitcoin’ market dominance—the share of the total crypto market cap held by BTC—has also seen fluctuations.
As Bitcoin hit $75,000 last week, its dominance spiked above 60.5% before retreating to 58.5%. It has since rebounded, resting at 59.6% as of this writing.
This ebb and flow in Bitcoin’s dominance could indicate growing interest in altcoins as capital rotates, potentially marking early signs of an approaching altcoin season even as Bitcoin climbs.
The big question now is, can Bitcoin continue to break new records, or are we approaching the peak of this cycle? Let’s explore.
Bitcoin’s open interest hits record levels
As Bitcoin continues its record-breaking run, underlying metrics offer valuable insights into the market’s potential direction.
Among these, Bitcoin’ Futures open interest stands out, reaching an all-time high of $51.3 billion as of Nov. 11. In simple terms, open interest reflects the total value of outstanding Bitcoin futures contracts that remain unsettled.
These futures contracts are agreements between buyers and sellers to trade Bitcoin at a predetermined price on a future date. A high level of open interest signals large capital being bet on Bitcoin’s future price.
However, this high level of open interest also implies increased volatility. When substantial capital is tied up in futures, even minor price fluctuations can trigger large-scale liquidations.
Over the 24 hours leading up to Nov. 11, $165 million in Bitcoin futures positions were liquidated. Liquidations occur when traders using leverage (borrowed funds) can no longer support their positions due to adverse price movements. In such cases, exchanges automatically close these positions to limit further losses.
Of the $165 million liquidated, $37 million were in long positions (bets that Bitcoin’s price would rise), while $128 million were in short positions (bets that it would fall).
This imbalance, with a larger share of liquidations in short positions, illustrates a classic short squeeze: as Bitcoin’s price rises unexpectedly, traders betting against it are forced to buy back Bitcoin to cover their positions, adding further upward pressure to the price.
The all-time high in open interest, coupled with the large liquidation of short positions, suggests a continuation of bullish momentum. As more futures contracts are opened and short positions are covered, Bitcoin could push even higher.
Bullish momentum, strategic reserves, and a heating Market
Bitcoin’s latest rally has fueled a bullish narrative across financial and political spheres.
Institutional interest in Bitcoin has never been stronger, with investment giants like Bernstein—an asset management firm with $800 billion under management—issuing bold recommendations to clients.
In its latest report, Bernstein advised investors to “buy everything you can” and warned of the risks of underexposure to crypto assets.
Beyond the financial sector, political support for Bitcoin is also intensifying. Leading this charge is Senator Cynthia Lummis of Wyoming, famously known as the “Bitcoin Senator.”
A longtime supporter of cryptocurrency, Lummis recently took to social media, declaring, “WE ARE GOING TO BUILD A STRATEGIC BITCOIN RESERVE,” reasserting her commitment to making Bitcoin a part of the national economic strategy.
On the technical front, some analysts foresee a potential pullback in the near term. Michaël van de Poppe, a widely followed crypto analyst, recently noted that with Bitcoin’s price reaching $81,000, a “flush” of futures positions could be imminent.
“Massive futures positions are open, and I think we’ll see a flush happening in the coming week before we continue the upward trend,” he shared.
This scenario doesn’t necessarily signal trouble; in fact, a brief correction or consolidation might create new opportunities for investors to enter the market or for those on the sidelines to expand their positions.
Essentially, while the short-term outlook remains positive, investors should be mindful of the potential cooling-off period that often follows periods of euphoric highs.
Is Bitcoin heading for new highs?
With Bitcoin’s momentum gaining strength, predictions are pouring in—from those grounded in historical patterns to those based on advanced forecasting models.
Respected analyst Gert van Lagen recently observed that Bitcoin has “broken parabolically out of Base 4,” suggesting that this “blow-off wave” could push Bitcoin’s price into the range of $220,000 to $320,000, though he has yet to provide a specific timeline.
Adding to the bullish outlook, Bitcoin Magazine Pro referenced the widely-discussed stock-to-flow model, which predicts Bitcoin could reach an astounding $420,000 by April 2025.
The S2F model, popularized by the analyst PlanB, leverages Bitcoin’s fixed supply and the increasing scarcity that follows each halving event to forecast prices.
Despite facing criticism for occasional deviations, the model’s long-term accuracy has kept it popular within the crypto community.
Meanwhile, veteran trader Peter Brandt, known for his extensive market experience, also envisions a bullish path for Bitcoin.
Brandt suggests that Bitcoin’s price movements from January to March 2024 may only mark the start of a “Mark-Up” phase, during which, as he describes, “BTC runs—it runs.” Based on this phase alone, Brandt projects Bitcoin could reach $125,000 by year’s end.
Adding to this outlook, Ki Young Ju, another respected voice in the crypto sphere, pointed out that “BTC futures market indicators” are currently showing signs of overheating.
He suggests that, although we’re in a vigorous “price discovery” phase, a cycle of corrections and consolidations could sustain the current bull run, hinting that BTC could slide down to $58,000 by year’s end.
With a mix of historical patterns, predictive models, and Bitcoin’s supply-driven scarcity, the market seems to be entering a phase of unprecedented possibilities.
However, as prices climb and models forecast vastly different targets, the journey to these levels will likely be marked by a series of corrections and surges. Investors are advised to trade wisely, consult a financial advisor, and invest only what they can afford to lose.
This article first appeared at crypto.news
