Key Takeaways:
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More than $ 313 million in Bitcoin Bearish positions are liquid, the signal conditions for a short squeeze.
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The gold momentum has been highlighting the search for investors for alternatives because interest rate expectations are getting traction.
Bitcoin (Btc) related to the level of $ 121,000 on Thursday, which marked the highest point in seven weeks. The bulls remain confident, noting that the current conditions were stronger than they were in mid -August when the BTC was easily moved by $ 124,000.
Beyond avoiding the fears of gold and gold support, bitcoin derivatives suggest entrepreneurs who are caught on the guard, a setup that often creates conditions for a short squeeze.
In contrast, gold was stuck near $ 3,400 nearly two months before mid -August, when Bitcoin advanced to its high record. At this time, global trade tension intensified as the temporary 90-day reduction of Chinese import tariffs expired on August 12, which picked up the expectations of inflationary pressure.
Decreased inflation risks and gold returns favor to those acquired in Bitcoin
The latest US Personal Consumption Expenditures Price Index, released Friday, showed an increase of 2.9% from August, in accordance with analyst forecasts. In inflation no longer viewed as a pressing concern, entrepreneurs have gained confidence that the US Federal Reserve (FED) will maintain its course towards further interest rate cuts.
Entrepreneurs who bought Bitcoin above $ 120,000 in August ended up failing, as import tariffs failed to negatively affect the US trade balance or retail sales, at least for a short time. Bitcoin’s October Advance coincides with a 16% rally in gold prices for six weeks, while the World Gold Council Data Points to steady accumulation of central banks.
According to the CME Fedwatch’s tool, the implied possibility of decreased US federal rates by 3.50% or below January 2024 now stands at 40%, compared to 18% in mid -August. Investors may accept the current trajectory of inflation, but ongoing weakness in the labor market may challenge the recent S&P 500 all-time high, especially amid the uncertainty tied to the closure of the US government.
On Monday, US Federal Reserve Vice Chair Philip Jefferson expressed concern for the labor market, warning that it would “experience stress” if left unsupported. Jefferson stated pressure on trade, immigration, and other policies, and other rules, According to to Reuters. He added that these effects will “even show up in the coming months,” which motivates entrepreneurs to look for alternative fence instruments.
Bitcoin derivatives and reduced concerns in the AI sector reduce pressure
During the three days leading to the entire Bitcoin time in mid-August, entrepreneurs have priced nearly equal odds of upward and down price movements, according to derivatives data. Now, however, the same indicator of BTC options indicates a moderate fear of correction, with options to put (sell) trading options in a premium compared to call options (buy).
More than $ 313 million in leveraged short (sell) positions in bitcoin futures are liquid between Wednesday and Thursday, according to coinglass Data. It further confirms that the rally above $ 120,000 caught by markets by surprise, reducing the possibility of heavy income in acquiring futures market if holding a momentum.
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Another factor that easing short-term risks is the successful sale of Openai sharing with a record of $ 500 billion appreciation. The artificial intelligence sector faces increased investigations following US exporting restrictions on advanced AI chips in China and Meta’s decision to freeze the AI division.
In investors showing stronger beliefs in the upcoming interest rate cuts in the US and seeing less risk of a correction in the stock market, the Bitcoin path to $ 125,000 and higher appears to be especially possible. Meanwhile, the stable momentum of gold features the growing preference of entrepreneurs for successors in the traditional bond and equity market.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
