Main Points:
- Bitcoin (BTC) price is approaching $70,000, driven by bullish sentiment ahead of the U.S. presidential election.
- Futures open interest has surged to a record $40.63 billion, signaling strong market inflows.
- The crypto market is rallying broadly, with coins like Solana (SOL) and Ethereum (ETH) experiencing gains.
- Traders expect favorable outcomes for cryptocurrencies if Donald Trump wins the election, hoping for regulatory reforms.
- The rise in leverage indicates increased risk tolerance, potentially leading to market volatility.
- The broader market is also benefiting from macroeconomic factors in Japan and China.
The Surge in Bitcoin Price Ahead of U.S. Elections
Bitcoin’s price continues its upward momentum, nearing the $70,000 mark. This rise is largely driven by the upcoming U.S. presidential election, as traders speculate on how political outcomes will influence regulatory landscapes favorable to cryptocurrencies. According to data from CoinDesk, Bitcoin surged by 1.5% over the past 24 hours, bolstered by increased futures open interest, which signals strong market inflows. As of the weekend, Bitcoin futures open interest across major exchanges surpassed $40.63 billion, marking an all-time high.
The total number of outstanding contracts now stands at 592,000 BTC, reflecting levels last seen during the 2022 bear market. The Chicago Mercantile Exchange (CME) accounted for 40% of this open interest, emphasizing institutional involvement as CME’s futures hit $11 billion.
Record-Breaking Futures Open Interest
Futures open interest represents the total value of outstanding futures contracts that have not yet been settled. This surge suggests new capital entering the market, reinforcing the bullish price trend. The spike in Bitcoin’s price beyond $68,000 was accompanied by over $2.4 billion in new Bitcoin inflows, a clear sign that investors are optimistic about future price movements.
Augustine Fan, Head of Insights at cryptocurrency asset management firm SOFA, commented that the rapid increase in futures open interest points to the establishment of new long positions. This indicates that investors expect prices to rise further, which is a positive signal for Bitcoin.
Additionally, leverage in the market has also increased, as indicated by CryptoQuant’s data, which showed that the ratio of open interest to market capitalization jumped from 0.20 to 0.21. This rise in leverage demonstrates growing risk appetite, although it may also lead to increased volatility and liquidations in the coming weeks.
Broader Market Rally and the Impact of AI-themed Meme Coins
The bullish trend in Bitcoin has spilled over into the broader cryptocurrency market. Coins like Solana (SOL) have risen over 7%, fueled by renewed enthusiasm for speculative meme coins, this time with a focus on artificial intelligence. Ethereum (ETH), Cardano (ADA), Binance Coin (BNB), and Ripple’s XRP have all seen gains of up to 4%. Even meme coins such as Dogecoin (DOGE) and Shiba Inu (SHIB) climbed by 3%.
Among mid-cap assets, ApeCoin (APE) led the pack with a remarkable 21% increase in the last 24 hours. The launch of its native blockchain network, ApeChain, has raised expectations that ApeCoin’s utility will grow as new tokens are issued on this platform. However, it remains to be seen whether ApeCoin can maintain long-term growth and stability.
U.S. Presidential Election: A Critical Moment for Bitcoin
With the U.S. presidential election scheduled for November 5, traders are closely watching how political outcomes may impact the cryptocurrency market. Betting platform Polymarket currently gives Donald Trump a 60% chance of winning, while Kamala Harris stands at 39%. Many in the cryptocurrency space believe a Trump victory, coupled with Republican control of Congress, could lead to favorable regulatory reforms. This includes the digital asset reform plan supported by Trump and Senator J.D. Vance, which could potentially pass through Congress.
Fan from SOFA highlighted that the combination of a Trump presidency and Republican control would be the most favorable outcome for cryptocurrencies. This sentiment is echoed by QCP Capital traders in Singapore, who believe that the convergence of macroeconomic factors in Japan, China, and the U.S. election is positioning Bitcoin for further gains.
Macroeconomic Factors: Japan and China
In addition to election-related optimism, global macroeconomic conditions are also playing a role in Bitcoin’s price surge. In Japan, inflation remains low, with the overall inflation rate dropping from 3.0% to 2.5%. This has led to market speculation that the Bank of Japan will refrain from raising interest rates, thus weakening the Japanese yen and increasing the demand for riskier assets like Bitcoin.
Meanwhile, in China, the central bank recently lowered its benchmark lending rate as part of efforts to stimulate economic growth and prevent a collapse in the housing market. This dovish stance has provided further support to risk assets, including cryptocurrencies.
QCP Capital’s traders noted that the combination of rising U.S. equities, a weakening yen, and the impending U.S. election has strengthened risk-on sentiment. This has fueled the rally in risk assets, further supporting the idea of an “Uptober,” a term used to describe October’s traditionally bullish performance for Bitcoin.
The Path to $70,000 and Beyond
The convergence of election-related optimism, record-breaking futures open interest, and favorable macroeconomic conditions in Japan and China has set the stage for Bitcoin to potentially breach the $70,000 mark. Traders are increasingly confident that a Trump victory could lead to regulatory reforms that benefit cryptocurrencies, and institutional interest, as shown by the record futures open interest, continues to drive market inflows.
While rising leverage indicates growing risk tolerance, it also suggests that volatility could increase in the weeks leading up to the election. As broader market trends, such as AI-themed meme coins, further energize the cryptocurrency space, Bitcoin and other leading assets are well-positioned to continue their upward trajectory.
