Is Bitcoin Dead? Bitcoin Falls, But Bullish Bets Pile Up

Is Bitcoin Dead? Bitcoin Falls, But Bullish Bets Pile Up. Traders Are Aiming for $50,000.

6 November 2023

Is Bitcoin Dead? Let’s find out together as Bitcoin and other cryptocurrencies fell Friday, reducing gains after the largest digital asset reached its highest level since May 2022 this week, while crypto traders remain confident that the surge is just getting started.

Bitcoin’s price has dropped 3% in the previous 24 hours to around $34,400 after approaching $36,000 on Thursday, its highest level since a harsh bear market intensified last spring. The largest cryptocurrency has risen by 30% in a few weeks, bursting out of a multi-month slump over the summer, during which Bitcoin volatility and trading volume had reached historic lows.

“Overall, the jubilant mood and the bull party continue in the crypto space. It’s been a long time since we have had such positive sentiment, and many are hopeful about a coming bull market,” said Rachel Lin, CEO of trading platform SynFutures. “For the short-term, there are some negative signs, like the relative reaching overbought levels both at daily and weekly time frames.”

Bitcoin has been spurred partly by expectations that US authorities would soon permit the debut of spot Bitcoin exchange-traded funds (ETFs), ushering in a new wave of retail and institutional investor interest in digital assets. Geopolitical risk from the Middle East crisis has also resurrected the “digital gold” narrative for Bitcoin, with bulls positioning the currency as a safe haven asset.

Bitcoin, like the Dow Jones Industrial Average and the S&P 500, has lately surged based on the Federal Reserve’s decision to keep interest rates constant. Markets now anticipate that the Fed has completed its campaign of rapid rate rises, which have weighed particularly heavily on risk-sensitive assets such as tokens and cryptos.

There are also indications from within the cryptocurrency markets that the trading environment is becoming more robust. Following Bitcoin’s summer collapse, bigger traders are returning to the market, indicating increased institutional interest and increasing trading volumes. “We are seeing an increase in the number of users and transactions, as well as in the price.” “This is a positive sign for the entire ecosystem,” Lin added.

According to Lin, crypto bulls expect the recent surge to continue, pointing to high concentrations of December Bitcoin call options at the $40,000, $45,000, and $50,000 levels. Call options provide traders the right to buy an asset at a specific price and time, and open interest at these levels is bullish. “This suggests a large number of people are willing to bet that Bitcoin will be significantly higher in two months than what it is today,” he added. Explaining the answer to the question: Is Bitcoin Dead?

Beyond Bitcoin, Ether, the second-largest cryptocurrency, dropped 2% to below $1,800. Smaller tokens or altcoins performed more inconsistently, with Cardano rising 4% and Polygon falling 2%. Memes Coins were down 3%, with Dogecoin and Shiba Inu down 3% each.

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