Reclaiming the $95,000 Level
After a brief dip below $91,000 on November 26, Bitcoin (BTC) reclaimed the $95,000 level, marking a two-day, 5% rally. This surge decouples from traditional markets, particularly United States government bonds, indicating a shift in investor sentiment.
Decoupling from Traditional Markets
The chart below illustrates the divergence between Bitcoin’s price and US 2 Year Treasury note yields.
Source: TradingView/Cointelegraph
This decoupling suggests that investors are moving away from Bitcoin’s "risk-on" perception, driven by its hard monetary policy and censorship-resistant features. As a result, the likelihood of reaching $100,000 before year-end increases.
Global Economic Challenges
Some of the world’s largest economies are facing growth challenges, leading to concerns about market stability. This has led investors to seek refuge in scarce assets, supporting Bitcoin’s performance.
French Government Debt and Greece’s Yields
On November 28, the 10-year yield on French government debt rose to 3%, matching Greece’s debt yields. According to CNBC, this data "shows the extent of concerns over political turmoil in France as the government struggles to get support for its 2025 budget that aims to cut spending."
France’s budget deficit is projected to reach 6.1% in 2024, more than double the eurozone’s proposed limit of 3%. This situation has contributed to market volatility and has led investors to seek safe-haven assets like Bitcoin.
Russia’s Economic Struggles
Russia, another global economic powerhouse, saw its domestic currency, the ruble, drop to its lowest level since March 2022. The central bank intervened in response, but President Vladimir Putin quickly dismissed concerns despite inflation soaring to 8.5% in October.
The central bank has raised interest rates to 21%, but this measure has yet to curb persistent price increases. Russia’s economic struggles have further exacerbated market uncertainty, making Bitcoin an attractive safe-haven asset.
Bitcoin ETF Inflows and Miner Accumulation
Inflows into US spot Bitcoin exchange-traded funds (ETFs) also contributed to the bullish outlook, reversing a two-day negative streak on November 27.
Net Inflow of $103 Million
The net inflow was primarily directed into Fidelity’s FBTC and Bitwise’s BITB, while BlackRock’s leading IBIT fund remained flat. This marked a significant turnaround from the previous $548 million in outflows on November 25 and 26.
Miner Accumulation Signals Confidence
Bitcoin miners’ flows ended a 10-day stretch of average outflows, according to Glassnode data, with increasing deposits on miner-controlled addresses. While this is an estimate, lacking official confirmation, it has nonetheless contributed to a more bullish market sentiment.
Typically, miners’ accumulation signals confidence in the ongoing bull market, while profit-taking often generates unwarranted fear, uncertainty and doubt (FUD). To provide context, the 30-day average miners’ revenue stands at 476 BTC, suggesting that at least 30% in outflows should be expected to cover expenses.
MicroStrategy’s Bitcoin Holdings
A report from Bernstein Research estimated that MicroStrategy will control 4% of the total Bitcoin supply by the end of 2033. This addresses concerns about the company’s large premium relative to its BTC holdings. The firm currently holds a record 331,200 BTC in its treasury and plans to continue its strategy, including issuing debt and stock.
Bitcoin’s Path to $100,000
Bitcoin’s path to $100,000 also depends on how the US economy and the dollar respond to current macroeconomic conditions. However, on-chain data and institutional interest remain robust, indicating strong bullish momentum that could propel BTC toward new highs.
In conclusion, Bitcoin’s surge above $95,000 is driven by a combination of factors, including decoupling from traditional markets, global economic challenges, and investor sentiment shifts. The likelihood of reaching $100,000 before year-end increases as investors seek refuge in scarce assets like Bitcoin.
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