BTC dominance nears 60% — Will November’s rate cuts and election push Bitcoin past $100K?

As a seasoned cryptocurrency analyst with over a decade of experience in the market, I’ve witnessed firsthand the rollercoaster ride that Bitcoin takes us on. The current Cup & Handle formation we’re seeing is reminiscent of the excitement that preceded the 2017 bull run, but with a more mature and sophisticated understanding of the market dynamics.

Could Bitcoin‘s dominance, currently at nearly 60%, propel it to surpass $100K due to the significant events in November, or might unforeseen factors disrupt Bitcoin’s ascent instead?

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BTC dominance holds strong amid market shifts

As autumn unfolds, Bitcoin’s (BTC) control over the crypto market – the proportion of the total cryptocurrency market value it owns – is presenting an engaging situation. At approximately 59.7%, a figure not seen since April 2021, it seems poised to surpass the 60% mark.

Currently, as of October 28th, Bitcoin’s price has experienced a nearly 2.5% increase over the past 24 hours, placing it approximately at $69,000. This growth brings it ever nearer to the $70,000 mark, a significant level that some analysts refer to as a “psychological resistance” point, which could potentially influence market opinions and trends.

The increasing influence of Bitcoin over other cryptocurrencies suggests we’re experiencing a “Bitcoin Period.” The Altcoin Season Index, presently at a minimum of 25, indicates that merely 25% of the top 100 non-stablecoins have surpassed Bitcoin in the last three months. On this scale from 1 to 100, scores below 25 indicate a Bitcoin Season.

It’s quite intriguing that the rise of Bitcoin’s influence coincides with significant upcoming occasions. For instance, the U.S. Presidential Election scheduled for November 3rd might have a profound impact on cryptocurrencies.

Two days following the election, the Federal Reserve is set to convene for their upcoming policy meeting on November 7th. Based on predictions made by speculators using the CME FedWatch Tool, there’s nearly a 100% chance of a 0.25% reduction in interest rates.

Let’s delve into the current mood of the market as Bitcoin’s influence edges closer to 60%, and examine what professionals anticipate for Bitcoin and the entire cryptocurrency sector, given these significant triggers on the horizon.

BTC ETFs closing in on major milestones

As November’s schedule is filled with significant market events, Bitcoin Exchange Traded Funds (ETFs) are approaching a notable achievement that might strengthen Bitcoin’s position within the financial system even more.

As U.S. spot Bitcoin ETFs approach a combined 1 million BTC holdings, traders are eyeing potential tailwinds to drive the market higher. 

Presently, these Exchange-Traded Funds (ETFs) are keeping close to 977 thousand Bitcoins, which is roughly equivalent to $67.4 billion. This represents approximately 5% of the overall Bitcoin market capitalization, which stands at around $1.36 trillion.

As a crypto investor, hitting the 1-million BTC mark feels like a game-changer, signifying a remarkable surge in institutional interest. This monumental milestone might just be the spark that ignites further price surges, fueling even more growth.

According to Nate Geraci, President of ETF Store, it’s estimated that approximately $1.5 billion could be used to purchase the additional 23,000 Bitcoins required to hit a significant milestone.

If ETFs continue to bring in approximately $300 million per day, we might reach this significant point by the end of this week.

In the past fortnight, approximately $3 billion has flowed into Bitcoin, as per Bitcoin analyst Alessandro Ottaviani. This surge has caused many experts to anticipate that Bitcoin might attain unprecedented peaks if this trend continues until November.

Furthermore, the upcoming Federal Open Market Committee meeting by the Fed might discuss a possible reduction of 0.25% in interest rates. If this rate reduction takes place, it may introduce additional funds into the market, which could fuel Bitcoin’s rising trend.

Globally, it’s been announced that Russia will end its ban on Bitcoin mining starting November 1st, aligning with a growing pattern among governments relaxing their cryptocurrency regulations. This move could potentially increase the attractiveness of Bitcoin and strengthen its underlying system.

Altogether, these favorable developments may lay the groundwork for Bitcoin’s next major move.

Election odds and what they mean for Bitcoin’s future

As the U.S. presidential election draws near, cryptocurrency enthusiasts are contemplating the possible effects that each candidate’s win might have on Bitcoin.

As reported by Polymarket, a widely-used prediction platform, it appears that Republican Donald Trump currently stands as the frontrunner with approximately a 2/3 likelihood (66.1%) of emerging victorious. This confidence is bolstered by a substantial amount of bets totaling $720.9 million. On the other hand, Democrat Kamala Harris trails behind with about a 1/3 probability (33.9%), having garnered roughly $456.1 million in wagers for her potential victory.

Similarly, Kalshi’s data places Trump’s odds at 62% and Harris’s at 38%.

On the other hand, data from the New York Times’ poll suggests a different perspective: Harris is slightly ahead by 1 percentage point (49% to Trump’s 48%), which represents her narrowest advantage since August, according to Nate Cohn, the Times’ chief political analyst.

In simple terms, the election is very tight, with seven key states that could decide the winner. Minor changes in poll results might give one candidate a landslide victory in these contested territories, leaving the ultimate outcome unpredictable.

Trump’s supportive statements towards cryptocurrencies, such as his promise to act as a “cryptocurrency president,” have sparked optimism about potential policies that could foster increased Bitcoin investments.

Instead, a victory for Harris could potentially bring instability as her conservative approach towards digital currencies might create uncertainty among investors regarding future regulations.

With two potential results still on the table, it appears that the market might react swiftly in the short term as soon as the final decision is made public.

Crypto and macro perspective

As Bitcoin hovers around $69,000, financial analysts are abuzz discussing its potential path forward, particularly in light of upcoming global events.

According to crypto expert Michael van de Poppe, the current trading period for Bitcoin has been relatively stable for one of the longest spans since 2016 and 2020. He interprets this eight-month phase of stability as a tranquil prelude to potential turbulence ahead.

Based on van de Poppe’s analysis, a surge in Bitcoin might lead it to reach unprecedented levels, potentially valued between $90,000 and $100,000 by year-end, given that the current momentum continues.

One major pattern that has analysts excited is Bitcoin’s “Cup & Handle” formation, which has been forming over the past 3.5 years. 

A prominent figure in the crypto world views this trend as a bullish signal, implying that Bitcoin might surge towards a projected price of $110,000. He referred to this configuration as a strong indication of a significant price increase in the near future.

Instead of just focusing on specific technical trends and price levels, it’s essential to consider the broader economic environment as a significant factor influencing Bitcoin’s movement.

According to Van de Poppe, the typical four-year market cycle for Bitcoin could potentially veer off course. With decreasing interest rates and more liquidity being provided by governments like China, he posits that Bitcoin’s growth potential may last longer than initially anticipated.

He adds, “If those [rates] keep falling and governments continue to print money,” Bitcoin’s peak might not arrive until 2026.

However, the bullish sentiment comes with necessary warnings. 

According to analyst Ali who specializes in Bitcoin, for a significant increase to occur, the cryptocurrency should sustain its critical support at around $65,000. If it manages to do so, he anticipates a possible surge up to $72,000, followed by a minor dip, before another potential rise toward $78,000.

To summarize, although market signs and broader economic conditions suggest a positive outlook, it’s crucial to remember that there could be significant fluctuations in the market, particularly considering the upcoming U.S. elections and Federal Reserve decisions. In other words, while things might look promising, there’s still a possibility of market turbulence ahead.

A word of caution remains: though the market leans bullish, Bitcoin’s path is never without surprises. Trade wisely, and never invest more than you can afford to lose.

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2024-10-28 20:15