ETFs not the only factor behind Bitcoin’s run

Ryan Lee, principal analyst at Bitget Research, observed that Bitcoin exchange-traded funds are playing a significant role in driving demand, but many factors are contributing to Bitcoin’s momentum.

Since January 2024, when spot Bitcoin (BTC) ETFs began trading in the US, there have been massive inflows into the market. These investment products have accumulated net inflows of over $24 billion, with net inflows of $5.4 billion in October alone.

However, Lee told crypto.news that ETFs are not solely responsible for Bitcoin’s uptrend, with the asset retesting the $73,000 mark amid an impressive recovery.

Political and technical factors fueling the uptrend

Lee noted that the upcoming US presidential elections are another catalyst for Bitcoin’s upward movement. Notably, both major candidates Donald Trump and Kamala Harris have voiced their support for clearer regulatory frameworks for digital assets.

While Trump is more forward-thinking in his approach, Lee expects a more supportive stance towards the industry regardless of the outcome of the election. This further increased market confidence in Bitcoin.

“As the election approaches, the market is predicting that the future administration, whether led by Trump or Harris, may adopt a friendlier stance towards the cryptocurrency industry.”

Lee added.

Bitget Research’s chief analyst also noted technical factors. He highlighted the recent golden crossover pattern in which Bitcoin’s 50-day moving average broke above its 200-day moving average on October 27. This cross indicates a bullish trend.

Upcoming economic indicators will affect the market

Looking ahead, Lee argued that several upcoming economic events could impact Bitcoin’s performance through November.

He emphasized that the Federal Reserve’s interest rate decision on November 7 could lead to a 25 basis point cut, potentially increasing market liquidity and benefiting crypto assets.

“Currently, the US Dollar Index and Treasury yields are rising, but a rate cut could potentially boost crypto assets by improving overall macroeconomic liquidity.”

Lee says.

Other key metrics such as CME’s BTC open interest recently reached an all-time high, signaling significant interest in Bitcoin in the futures market. He also noted that sustained inflows into Bitcoin ETFs could continue to provide support.

Finally, a potential BTC purchase by Microsoft is on the horizon. Lee hopes that if Microsoft’s board approves the acquisition, it will be a landmark event in Bitcoin adoption and add significant institutional interest.

Given these various factors, Lee predicts that the Bitcoin price will likely fluctuate between $66,000 and $75,000 in November, but market volatility is expected to remain high.

Bitcoin is down 4% in the last 24 hours and is trading at $69,350 at the time of writing. Its market capitalization dropped below $1.4 trillion, with a daily trading volume of $45 billion.

BTC price | Source: crypto.news

One of the main reasons behind the BTC price correction could be that consecutive gains over the past week have pushed Bitcoin into the overbought zone. Currently, the BTC Relative Strength Index is hovering at 32, indicating that the flagship cryptocurrency is close to the oversold zone.