Bitcoin was lower, pausing after after a three-day rally that saw prices approach $16,000, their highest since early 2018.
The recent rally left the largest cryptocurrency up 116% year to date, and some bullish digital-asset market analysts were already looking at even higher levels. Denis Vinokourov, head of research at the crypto prime broker Bequant, said in an email there’s the potential for a squeeze in the options market to push up prices in the next several days.
“This, coupled with continued uncertainty around U.S. election results and the economic fallout from the Covid pandemic’s resurgence, could see us push towards $17,000,” he said.
In traditional markets, U.S. futures were lower ahead of a closely-watched government report due out Friday on employment trends in October. Gold rose 0.3% to $1,956 an ounce.
As bitcoin shot above $15,000, analysts on Thursday were reaching back into the cryptocurrency’s 11-year history for clues on what comes next.
Prices have already doubled this year, just as they did in 2019, and bitcoin is now being openly discussed by global banks like Deutsche Bank as the world’s best-performing asset. A lot of observers say the price movements are random and not necessarily linked to broad macroeconomic trends. While the relationship remains on the weaker side, for most of this year, correlation between the cryptocurrency’s price movements and traditional markets have been increasing.
And the investment narrative that bitcoin fund marketeers are pitching looks pretty strong at the moment: Not only has the cryptocurrency been cast by many bulls as the future of money and perhaps a threat to the existing financial system, but it’s also positioned as an inflation hedge at a time when the Federal Reserve and other central banks are printing trillions of dollars of money to stimulate markets and…