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Bitcoin reaches $66K, continuing its upward trend

Bitcoin surged on Monday, putting a stop to a nearly three-week-long sideways churn that had seen steady demand of around $60,000.

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The cryptocurrency surpassed $66,000 during European hours and was poised to break the record high of $66,975 recorded on Oct. 20. Ether, the native coin of Ethereum’s blockchain, also shattered its previous high early Monday, momentarily crossing $4,700, according to CoinDesk statistics. By market capitalization, Bitcoin is the world’s largest cryptocurrency, with Ethereum coming in second.

Bitcoin may be being propelled higher by falling real or inflation-adjusted bond yields, according to Yuya Hasegawa, crypto market analyst at Japan’s exchange bitbank. Hasegawa said in an emailed statement that “real rates decreasing owing to inflation worries may have driven the current BTC rise.” According to Treasury Department data, the 10-year real yield fell to -1.09 percent on Friday, the lowest since August 30.

Bitcoin is largely regarded as a store of value asset similar to gold, and while Federal Reserve Chairman Jerome Powell stated last week that price pressures may be temporary, worries of out-of-control inflation are still there.

According to Eddie Wang, senior analyst at OKLink research, the crypto exchange OKEx’s on-chain data research arm, on-chain data also shows favorable indicators for bitcoin in the medium term. Since July, the network’s hash rate has been continuously growing, the mining difficulty has climbed eightfold, and miners have gathered more than BTC 3,000 in their wallets, according to Wang.

The number of unique wallets with a balance greater than zero has risen to 39 million, near to the record high of 39.28 million non-zero wallets set in May, according to Wang, who cited the statistics as an indication of market optimism.

According to Coinglass.com, the average financing rate on Monday was 0.0250 percent, compared to 0.0589 percent on November 3. Every eight hours, exchanges determine financing rates. 

An extremely high financing rate is commonly seen as indicating excessive bullish leverage. Traders are frequently forced to reduce long positions due to increased costs and sideways market movement, resulting in a price drop.

The sideways activity witnessed in recent weeks, according to data, is a normal bull market pause.

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