The price of Bitcoin reached the threshold of $31,000 today, its highest level since July 15. In this situation, some analysts believe that the growth in the value of interest rate-sensitive assets, such as gold, can be a positive sign of the continuation of the upward trend of this digital currency in the short term.
According to CoinDesk, while gold recorded a 6.7% growth in the last 30 days, the price of Bitcoin increased by more than 14.6%. Of course, the onset of tensions in the Middle East, along with continued speculation about the end of the Fed’s accommodative policy, suggesting that a period of inflation is ahead, caused gold to start rallying a week ahead of Bitcoin.
Greg Magdini, Director of Derivatives at Amberdata, exclaimed:
Interest rates are currently the biggest macroeconomic driver; But surprisingly, rate-sensitive assets such as gold saw an uptrend, which is good news for Bitcoin.
He added that war spending would traditionally drive inflation, and that the Federal Reserve would simultaneously signal a pause in interest rate hikes while the U.S. economy remains solid. Given the market’s optimism about spot ETFs being approved, the current trend is likely to lead to higher gold and bitcoin prices. Magdini noted:
Bitcoin remains a more attractive asset than gold due to its ease of transferability, its anonymity from government and its immunity to inflation.
Blockware Solutions analysts also believe that the current price growth is the result of the possible approval of a Bitcoin spot ETF on the spot market. They noted:
According to Alex Thorn, head of research at Formwide, the direction of option market makers indicates the possibility of a sudden move towards higher prices. Thorne explains that market makers maintain short gamma positions that force them to buy high and sell low as the market moves. Traders do this to bring their trading positions back into neutral, which will inadvertently increase price volatility. Thorne added:
As the spot price of Bitcoin rises, Bitcoin option market makers are increasingly moving into short Gamma positions. When gamma is short and the spot price rises, you must buy back into the spot market to keep the delta neutral. The result of these actions will be the short-term explosive growth of Bitcoin in the near future.