In brief
- Bitcoin has rebounded 4.5% since Saturday, nearing its mid-July record of $122,838.
- Derivatives data shows a jump in open interest, pointing to a surge in leveraged long bets.
- Traders are watching Tuesday’s CPI release for clues on potential Fed rate cuts.
Bitcoin is expected to break its all-time high this month as a positive macroeconomic outlook continues to support risk assets, including crypto, experts told Decrypt Sunday.
The weekend rally has helped undo losses witnessed last week, with Bitcoin up 4.5% since Saturday’s open and pushing the top crypto to trade just shy of its July 14 all-time high of $122,838, according to CoinGecko data.
Open interest has also risen by 7,834 BTC alongside a surge in spot and perpetual buying volumes, data from derivatives platform Coinalyze shows, with signs the move has been primarily fueled by speculative long positioning.
“There’s still plenty of fuel left for this bull run,” Sean Dawson, head of research at on-chain options platform Dervie, told Decrypt. Bitcoin is expected to hit “$150,000 before the end of the year,” based on volatility data he added.
Crypto prices climbed in the wake of last week’s rally in technology stocks, a surge that coincided with investor optimism over U.S. rate cuts and a sagging U.S. dollar.
The increased correlation between NASDAQ and Bitcoin “explains the recent price action,” crypto-focused intelligence newsletter Ecoinometrics wrote in a Sunday post on X.
“Bitcoin may be digital gold, but it trades like a risk-on asset. What really matters is whether markets are in a risk-on or risk-off regime,” it wrote.
Markets are now turning their focus to the July Consumer Price Index report, due Tuesday. Economists expect a 10 basis point uptick in the annual inflation rate to 2.8%.
A softer-than-expected print could bolster expectations for a Fed rate cut as early as September.
“We’re seeing the confluence of a number of macro and political factors that could send prices soaring,” Dawson said. “Crypto typically performs very well in low-rate environment conditions.”
Still, some traders are positioning defensively. Dawson noted increased demand for put options, suggesting rising concern over a potential upside surprise in the inflation data.
That could cause a “mini panic,” and could lead to a “sharp downturn,” Dawson added.
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