In a positive start of the week, Bitcoin's price went past $11,700, last seen 40 days back in early September, right before we crashed below $10,000.
At the time of writing, BTC/USD has been trading above $11,500 in the green with $1.7 billion in volume.
This price action resulted in a solid session with bitcoin futures recording $14 billion in aggregated daily volume while bitcoin options traded $350 million.
With this rise in BTC’s price, the digital currency continued tracking the increase in the stock market — the S&P 500 jumped to 3,534 yesterday, just 1.3% away from ATH of 3,580. With this, the one-month correlation between the equity market and bitcoin continues to strengthen, currently sitting at 53.7%, as per Skew.
In contrast, the US dollar index ventured down to 93; today it is slowly moving upwards.
However, an anomaly was seen in the gold prices, which didn’t make a move yesterday and is keeping between 1,910 and 1,925 today.
The Bullish Indicators
As BTC's price makes its way north, the number of whales, entities holding at least 1000 BTC, has started slowing down. The decrease started in early Sept., the first decline since late 2019, following the consistent growth throughout 2020, much like in 2012 and 2014-15.
Historically, this decline has signified increased retail interest and the beginning of a run-up to a market top, as per Glassnode. Although the current decline is slow and in early stages, “it may signify the beginning of another bull run.”
Meanwhile, another indicator, NVT Ratio, P/E (Price to Earnings) ratio of cryptos that measures Bitcoin's ratio of investor activity to capitalization, is giving off “very bullish signs,” presently at undervaluation levels equivalent to the COVID-19 white swan price bottom, noted on-chain analyst Willy Woo.
“In early and mid phases of a bull market NVT signals very strong investor activity (low NVT) as price continues to climb. You keep buying, as it’s this activity that is driving up price. It starts to weaken (high NVT) as we approach the top of the bull market,” noted Woo.
Bullish Macro Scenario
Besides these indicators, Grayscale continues to purchase more and more Bitcoin; just last night, it bought 11,540 BTC.
Meanwhile, in the macro sector, an unprecedented all-time low-interest rate in the US is a bullish scenario. The Bank of England has also asked banks how ready they are for zero and negative interest rates following its announcement last month. It was considering taking rates sub-zero if necessary. In March, BoE cut its benchmark rate to a record low of 0.1%
“Keep remembering… We have never seen anything like this before. Existing macro analytical frameworks will not work in the 20s. Traditional money has no value and will move to negative value soon. With guideposts gone, math changes, so Ancient Gold and New Bitcoin anchor,” said Dan Tapiero, co-founder of 10T Holdings.
Adding hopium to all the bullishness in the market is Real Vision Group founder Raoul Pal who says $1 million per Bitcoin by 2025 is on the cards.
“I just used the regression on the log chart since inception, $1m would be 2 S.D's. Oversold by 2025,” said Pal.