This month, Bitcoin (BTC) hit $35,000 and has been consolidating around the area. However, the Bitfinex Alpha report talks about the probabilities of the rally continuing in November.
The term “Uptober” was coined for the dramatic surge in price this month. However, as November approaches, the billion-dollar question is if the Bitcoin rally will continue.
60% Likelihood of a Bullish November For Bitcoin
The screenshot below shows that since 2013, Bitcoin has had a positive monthly closing in October eight times. Out of these eight positive monthly closes, November remained positive for Bitcoin five times.
This data suggests that in over 60% of instances, November remained bullish for Bitcoin after a green October.
Readers should note that the data of monthly returns is not sufficient to determine the future course of BTC’s price action. However, it indeed forms a pattern.
Read more: What Are Crypto Trading Patterns? A Basic Introduction
An Uptick in Derivatives Market Activity
Moreover, the Bitfinex Alpha report shared with BeInCrypto suggests that there is increased bullish sentiment in the options market. The screenshot below shows that in October, the Options Call Open Interest surged by 80%.
When traders buy option calls, they bet on the increase in an asset’s price. Whereas when traders buy puts, they believe that the price of an asset will decline.
Read more: How To Trade Bitcoin Futures and Options Like a Pro
On Oct. 27, BeInCrypto reported that the Bitcoin options market reached a new all-time high, surpassing 2021 bull market records. The total put and call positions hit $16.35 billion.
Bitfinex Alpha report says:
“Such metrics illuminate a clear trend: market participants, both seasoned and novice, are diverting significant capital towards options.
“Increased call options’ open interest does not immediately point toward a bullish outcome. However, most of this newly added open interest is for year-end dated options and thus represents a shift in risk appetite and investment strategy, pointing towards significant faith in long-term value appreciation.”
Bitcoin Short-Term Holders Are Booking Profit
While the balance in the wallets of long-term Bitcoin holders is nearly at its all-time high, short-term holders are booking profits. The screenshot below shows that when Bitcoin hit $35,000, there was an intraday surge in the short-term holder Spent Output Profit Ratio (SOPR) metric.
Bitfinex Alpha report explained:
“It is an on-chain profit and loss metric that moves above an equilibrium of one when investors are realising profit on their holdings.”
Currently $35,000 stands as an important resistance. With the selling pressure from short-term holders, the price of Bitcoin may remain sideways in November. However, the report states that Bitcoin is in the early stages of the bull market.
Read more: A Comprehensive Guide on Tracking Smart Money in the Crypto Market
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For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.
