Despite the stagnant prices, the 24.2 per cent gains since October 7 instil confidence, driven by the impending effects of the 2024 halving and the potential approval of a spot Bitcoin ETF in the US
Bitcoin has been trading within a narrow 4.5 per cent range over the past two weeks, suggesting a level of consolidation near the $34,700 mark.
In spite of the stagnant prices, the 24.2 per cent gains since October 7 instil confidence, driven by the impending effects of the 2024 halving and the potential approval of a spot Bitcoin ETF in the US.
Bears anticipate further macroeconomic data supporting a global economic contraction as the U.S. Fed holds its interest rate above 5.25 per cent in order to check inflation. For example, on November 6, Chinese exports dropped 6.4 per cent from a year earlier in October. Moreover, Germany reported October industrial production 1.4 per cent lower compared to the previous month on November 7.
The weaker global economic activity has led to West Texas Intermediate (WTI) oil prices dropping below $78 for the first time since late July, in spite of the potential for supply cuts from major oil producers. U.S. Federal Reserve Bank of Minneapolis President Neel Kashkari’s remarks on November 6 set a bearish tone, prompting a “flight-to-quality” response.
Kashkari stated: We have not fully solved the inflation problem. We still have more work ahead of us to get it done.
Investors have sought refuge in U.S. Treasuries, resulting in the 10-year note yield declining to 4.55 per cent, its lowest level in six weeks. Curiously, the S&P 500 stock market index has hit 4,383 points, its highest level in around seven weeks, defying expectations during a global economic slowdown.
This phenomenon can be attributed to the fact that the companies within the S&P 500 collectively hold $2.6 trillion in cash and equivalents, offering some protection as interest rates remain high. Despite growing exposure to major tech firms, the stock market provides both scarcity and dividend yield, aligning with investor preferences during times of uncertainty.