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Bitcoin's Recent Surge Driven by Macroeconomic Factors

Explore the macroeconomic influences behind Bitcoin's rise to $35,000 and its implications on future market trends.
Published on 2023-11-03

Bitcoin's Macroeconomic Influences

Bitcoin recently surged to $35,000, primarily driven by macroeconomic factors. A significant influence was the lower-than-expected Treasury supply in Q1, combined with a dovish stance from the Federal Open Market Committee (FOMC). These factors led to decreased bond yields, creating bullish conditions for risk assets, including Bitcoin.

Fibonacci Retracement and Market Pullback

The cryptocurrency hit the 38.2% Fibonacci retracement level at $35,912 before experiencing a pullback. Despite this rise, questions remain about the sustainability of this rally in promoting a long-term uptrend in global equities and bonds.

Derivatives Market Activity

Increased activity in the Bitcoin derivatives market indicates traders are preparing for possible market shifts tied to spot ETF approval. However, macroeconomic indicators, particularly bond yields, are seen as having a more substantial impact on Bitcoin than speculation over ETFs.

Bond Market and Investor Sentiment

Fluctuations in the bond market, such as the 30-year Treasury yield reaching a 16-year high above 5%, significantly impact investor risk sentiment. These changes play a crucial role in influencing the cryptocurrency market.

Current Price and Market Outlook

Bitcoin is currently priced at $34,235, with risks of breaking its uptrend channel. Traders are closely monitoring derivative indicators while awaiting potential market boosts from spot ETF approvals.

Upcoming Economic Events

Upcoming events like earnings reports from major companies and non-farm payroll data could lead to increased market volatility. However, significant regulatory actions would be necessary to push Bitcoin below the $32K support level.

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