Yuya Hasegawa, a cryptocurrency market analyst at Japan exchange bitbank, said that falling real or inflation-adjusted bond yields may be driving Bitcoin higher. “Real returns falling due to inflation fears may have caused BTC’s recent rally,” Hasegawa told CoinDesk. Data from the US Treasury Department shows that the 10-year real yield fell to -1.09% on Friday, the lowest since August 30.
Bitcoin is widely perceived as a store of value asset like gold and although the chairman of the Federal Reserve, Jerome Powell, reiterated last week that price pressures may be temporary, fears persist that inflation will spiral out of control.
“The inflation narrative still dominates the headlines and people are feeling the pressure globally“Coinbase said in its weekly email on Friday.” Whether it’s gas prices in the US, energy prices in Europe, or food prices in Latin America, the headwinds of constraints of the supply chain and the downsizing of the workforce have investors looking for a store of value. “
On-chain data is also showing bullish signs for Bitcoin over the medium term, said Eddie Wang, a senior analyst at OKLink research, the on-chain data research arm of crypto exchange OKEx. The network’s hash rate has risen steadily since July, mining difficulty has also increased eightfold, and miners have accumulated more than 3,000 BTC in their wallets since September, Wang said.
The number of unique wallets with a balance of more than zero has returned to 39 million, close to the record 39.28 million non-zero portfolios in May, Wang said, citing the data as an indicator of positive sentiment in the market.
An increase in bitcoin-pegged currencies and stablecoins is also a sign of a bull market, Wang said. The analyst noted that 6,022 wrapped bitcoins (WBTC) were printed on Ethereum in the past seven days, and Tether printed 1 billion of them. ERC-20 USDT on November 5.
Data tracked by blockchain analytics firm Chainalysis shows a renewed buildup by large investors, namely whales. Investors holding at least 1,000 BTC bought 142,000 coins in the last week of October, bringing the cumulative count to nearly 200,000 BTC, the highest in 2021.
According to Daniel Kukan, senior cryptocurrency trader at Swiss-based Crypto Finance AG, eBitcoin’s latest bullish move appears to be spot-driven as funding rates or the cost of holding long positions in the perpetual futures market remain low.
Data provided by Coinglass.com shows that the average funding rate was 0.0250% early Monday versus 0.0589% on November 3. Exchanges calculate financing rates every eight hours. In general, a very high funding rate is considered to represent excessive bullish leverage. A combination of rising costs and sideways price action often forces traders to cut long positions, leading to a price pullback.
Kukan said that the sideways action seen in the past two weeks was a typical bull market pause. “It was a healthy consolidation and the market has not tested the short-term support at $ 58,000, which is a strong sign,” Kukan added. “I can see some interest in selling above $ 70,000, [pero, supongo] we’re going to remove that level pretty quickly. “
The Japanese exchange bitbank expects the price of bitcoin to be as low as $ 58,000 and as high as $ 76,000 this week.
The previous all-time high for Bitcoin was due to the approval of the first exchange-traded funds backed by Bitcoin futures in the US.