BTC/USD Daily Chart
Bitcoin Derivatives: In 2017 and 2018 when derivatives were launched, their impact wasn’t yet profound on the BTC market.
However, following a massive adoption of futures and options, the impact on Bitcoin spot price bloomed with a focus key on the funding rate especially. Recent Bitcoin Derivatives Data indicated that the funding rate of Bitcoin futures markets is in the “neutral” after previously trading positive in the prior week.
A neutral funding rate is a scenario in which neither longs nor shorts are overleveraged based on antecedents, it is been said that a neutral funding rate always preceded major uptrends.
A Weakening Dollar Amid Geopolitical Tensions: at the moment, the scenario presents a weakening dollar amid geopolitical tensions escalated by the Tiktok ban. This adds up to the current weakness in the U.S. dollar as well as Coronavirus fears prompting investor flight to safety.
Also, U.S President Donald Trump recently signed a series of executive orders on Coronavirus stimulus which may have contributed to the narrative.
Craig Erlam of Oanda stated that due to a weakening dollar, Bitcoin is getting a bid, likewise gold.
Analysts say that where Bitcoin may be headed next in the near term could be deduced by its correlation ties with stocks and gold.
Whichever one, it correlates with most, which is not yet clearly defined, may give a hint on its next move. During the March market carnage, Bitcoin first correlated with stocks then after BTC’s recovery, it shifted to gold.
Gold hit all-time highs in its U.S. dollar pair weeks before Bitcoin began its rise and it still does. Another hint for where Bitcoin is headed in the near term is seen in a “gap” in CME Bitcoin futures markets.
Volatility over the weekend saw BTC futures close on Friday at $11,680 and start at $11,750, Bitcoin historically fills such “gaps” within days or even hours.
Bitcoin stock-to-flow chart as of August 10 (PlanB)
Image Credit: PlanB, Shutterstock
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