Sophia’s Thoughts On Nearly Breaking All-Time Highs
Bitcoin’s price has nearly broken through its all-time high. What factors are behind this price movement?
These are Sophia's Thoughts:
Bitcoin’s price just breached USD 70,000 for the first time since May, placing it a couple percent shy off of record highs.
With the U.S. election nearing, a potential Trump win, who is seen as pro-crypto, adds to Bitcoin's upward momentum.
Global rate cuts and China’s planned stimulus are fueling liquidity, setting up favorable conditions for Bitcoin's continued growth.
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🚀 Last week’s market performance
The market rose again this week, closing up 1.8%. Bitcoin (BTC) followed the market, gaining 3.7%. The worst performing coin of the week was ApeCoin (APE), which sold off 33.6% after a triple digit move up last week. The best performing coin this week was Raydium (RAY) which pumped 31%, making it the third largest decentralized exchange (DEX).
🧐 What is your crypto mood today?
In each Sophia's Thoughts newsletter, we ask about your crypto mood. Your response to this question helps Sophia get a better sense of the pulse of crypto markets. And this ultimately translates into better insights for you when combined with Sophia's AI models. Your data empowers Sophia to provide you with even better intelligence going forward!
🚀 Bitcoin breaks USD 70k
Bitcoin (BTC) broke past the USD 70,000 mark on Monday, October 28, reaching its highest level since May and briefly surpassing USD 73,000, though still shy of its all-time high. After months of sideways movement, Bitcoin has rallied nearly 50% since bottoming at USD 49,000 in early August, outpacing traditional assets like gold and the S&P 500, both of which have also been on record-setting streaks. Now sitting within striking distance of its peak price of USD 73,700, Bitcoin’s latest surge shows renewed momentum and confidence in the crypto market.
Bitcoin’s rise appears to be driven by a mix of increasing institutional interest and political anticipation. The upcoming U.S. elections are fueling speculation, with Trump’s pro-crypto stance appealing to investors hoping for a regulatory shift. Crypto ETFs also saw a boost last week with over USD 990 million in net inflows, with the majority flowing into Bitcoin. This strong demand from institutions signals continued confidence in Bitcoin’s potential as a hedge against inflation and as a reserve asset.
🟥 Will Trump Win?
A convergence of factors is supporting Bitcoin’s price rally. Matthew Sigel from VanEck noted that BTC’s price action ahead of the U.S. election mirrors 2020’s pre-election rally, which preceded a 120% rise over two months. It appears that investors are positioning themselves for a potential Trump victory, viewing him as the pro-crypto candidate with plans to ease regulatory pressure on the sector. Current Polymarket prediction markets show Trump leading with a 66% chance of winning, adding a new layer of momentum for BTC.
While Polymarket shows Donald Trump leading the race with a 66% chance of winning, other reputable polls paint a different picture. According to FiveThirtyEight’s aggregate of national polls, Kamala Harris holds a slight lead over Trump, with 48.1% to his 46.7%. This discrepancy shows the limitations of relying solely on Polymarket for election predictions.
Polymarket as a crypto-based prediction platform can suffer from selection bias and incentives that skew its odds. Critics believe that Its user base often leans libertarian and anti-establishment which may influence predictions toward Trump. With relatively low liquidity compared to traditional financial markets, Polymarket’s odds can be heavily swayed by a few large bets, making it vulnerable to manipulation by high-stake investors or “whales.” This contrasts with more comprehensive polls like FiveThirtyEight which account for a broader demographic sample and reduce the impact of individual influence.
💤 Monetary Easing & Shifts
Contributing to this bullish environment, global financial shifts are creating a supportive macro backdrop for Bitcoin. Central banks have recently initiated a cycle of rate cuts with dovish stances from the Fed and ECB, driving liquidity toward risk-on assets like BTC. In China, reports suggest plans for a substantial USD 1.4 trillion stimulus that analysts believe could further boost interest in Bitcoin as global liquidity grows.
Still, some analysts warn that Bitcoin’s rise could face short-term hurdles if macroeconomic data falls short of expectations. Crypto strategist Benjamin Cowen suggests that BTC’s rally could be influenced by U.S. labor market data due on November 1st. If unemployment figures increase, BTC may see a pullback similar to its corrections in April and August this year. Cowen notes that if Bitcoin struggles to hold above USD 70,000 in the coming week, the breakout may be pushed into early 2025 until further monetary policy revisions take place. For now, BTC’s path is supported by global liquidity, but investors remain alert to macroeconomic trends for further direction.
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