From October 27 to October 29, the price of Bitcoin rose by 9.7%, reaching a short-term high of $73,575, and then fell back to $71,500 on October 30. Although there was a short-term correction, various indicators such as derivatives market activity, on-chain data, and stablecoin demand indicate that Bitcoin has a solid foundation to break through $73,000 in the short term. The Bitcoin futures premium is a key indicator of leverage demand, reflecting the strong confidence of bullish investors. In a neutral market, monthly futures contracts usually fluctuate in the 5% to 10% annualized premium range due to the extension of the settlement period. The current market premium rate is 13%, the highest level in more than four months, indicating that although the Bitcoin price was hit at $73,575, the market has not shown significant weakness. The price trend of Bitcoin is similar to that of gold. On October 30, the international gold price hit a new high of $2,790, but then lost its upward momentum and entered a correction trend, affected by the recent macroeconomic data released that day (the US private sector employment report showed that 210,000 jobs were added in October, and the US Bureau of Economic Analysis reported that the GDP growth rate in the third quarter was 2.8%, slightly lower than 3% in the previous quarter). This economic resilience has reduced the possibility of the Federal Reserve making a significant rate cut, and reduced the real-time demand for alternative risk assets such as gold and Bitcoin.
On-chain and derivatives indicators of Bitcoin show that the market sentiment is becoming increasingly optimistic
Given the skepticism about US macroeconomic policy, the short-term correction in Bitcoin price is not surprising. It is worth noting that when the Bitcoin price broke through $70,000 on October 29, the net inflow of Bitcoin to exchanges surged, indicating that some short-term traders were eager to take profits at this price. However, by October 30, this trend had reversed, and Bitcoin began to flow out of exchanges rapidly. This indicates that the profit-taking by short-term traders at the historical high was a temporary behavior and part of the normal trading pattern. To further assess market sentiment, the demand for stablecoins in the Chinese market provides additional clarity. Strong demand for cryptocurrencies usually drives the stablecoin premium over the US dollar to around 2%, while a discount usually indicates a state of panic in the market. Recent data shows that the stablecoin premium in the Chinese market has slightly decreased from 0.7% to around 0.3%, remaining in a neutral range. Although the Bitcoin price corrected by $2,140 on October 30, this indicates that the market has high resilience. Combining on-chain indicators and derivatives indicators, there is ample evidence that traders are optimistic about Bitcoin's ability to maintain a bullish momentum in the short term.
