The weekly Bitcoin price fluctuation was minimal, but it was a quite dynamic week in terms of content.
First, there were many favorable news. The probability of Donald Trump, the Republican presidential candidate, being elected, which had been driving the rise in Bitcoin prices since mid-October, has increased further. Trump closed the third week of October with a 60:40 lead, and last week the gap widened to 65:35, a 30%p lead. This gap is still maintained as of the 28th.
There was an official statement at the 2024 BRICS (Brazil, Russia, India, China, South Africa) summit that cryptocurrency payments are necessary.
BRICS has 9 member countries, and currently more than 30 countries have expressed their intention to join BRICS. In addition to Russia and China, countries such as India, Turkey, and Iran have common ground in wanting to break the existing US and Western European-centric international order.
Russian President Putin said that "BRICS will adopt cryptocurrencies (virtual assets) for investment." This atmosphere is likely to increase global Bitcoin demand, along with the active inflow of funds into Bitcoin spot exchange-traded funds (ETFs) listed in the US.
The New York Stock Exchange (NYSE), one of the exchanges where US Bitcoin spot ETF trading takes place, has requested the US Securities and Exchange Commission (SEC) to allow it to extend the trading hours of Bitcoin spot ETFs to 22 hours a day. On the corporate demand side, Microsoft in the US said it will hold a shareholder vote on Bitcoin investment on December 10.
Rising US Treasury Yields Due to 'Trumponomics'
Despite these favorable factors, the background for Bitcoin prices not rising is ironically Donald Trump, the Republican candidate. While the positive effects that would occur if he was elected had pushed up Bitcoin prices until last week, this week the negative effects have come to the fore.
A representative example is the strange rise in US Treasury yields. US Treasuries have been rising since the Federal Reserve lowered rates by 50bp last month, rising about 50bp in the following month. The 50bp rate cut has become useless.
Trump has vowed to create a 'strong America' after being elected president, using a strong dollar and high tariffs. His economic policy is likely to lead to higher inflation and a rise in the dollar value. From this week, Wall Street investors have reflected his high probability of winning, and related economic indicators have shifted their focus.
As real interest rates rise and inflation rates start to rise again, it is not good for Bitcoin prices. These are the reasons why Bitcoin prices did not rise much despite the many favorable factors last week.
In this situation, the prices of altcoins are again losing the interest of investors. The possibility of an 'alt season' that briefly heated up also seems to have faded again. In the current market, even the second-largest altcoin Ethereum (ETH) does not seem to be able to rise easily. Only Solana (SOL) and a few meme coins are continuing their upward trend.
Volatility is expected to be high around this week's PCE data
The key to cryptocurrency prices this week is still the direction of Bitcoin prices. And Bitcoin prices are likely to be heavily influenced by the level of open interest in the derivatives market.
Bitcoin's open interest has been increasing significantly since the 10th, reaching an all-time high on the 25th, and was partially liquidated on the 26th, the options expiration date. Since the recent rise was heavily dependent on the derivatives market, the trend of the increase in open interest will be important for further Bitcoin gains.
Among global economic indicators, the US Personal Consumption Expenditures (PCE) price index to be released at the end of this month (31st) will be important. According to the Fed Watch data provided by the CME Group, the probability of a 25bp rate hike at the November FOMC is high as of noon on the 28th.
However, if the PCE data comes in high, there is a possibility of a rate hold decision or a hawkish statement. This week, we need to closely monitor this part. I wish all readers successful investments this week as well.
