As a seasoned researcher with years of experience in the cryptocurrency market, I find myself intrigued by the current state of Bitcoin and MicroStrategy. The surge in MSTR stock price, reaching a six-month high, is indeed an interesting development. While it’s too early to definitively say that this will push Bitcoin higher for the rest of October, as suggested by 10x Research, it does add an intriguing layer to the narrative.
The world’s leading Bitcoin corporation, MicroStrategy, observed an over 6% increase in stock price on Monday, reaching a six-month peak beyond $190. According to 10x Research, the MSTR share price is poised for a six-month breakthrough.
This situation might benefit the value of Bitcoin, as it’s been experiencing a tough period since early October. Currently, Bitcoin’s price is decreasing by 2%, dropping below $62,500 due to bears dominating the market prior to the upcoming US Consumer Price Index (CPI) data release on Thursday.
10x Research observed that a surge in Microstrategy’s (MSTR) stock price beyond $180 might trigger further optimistic trends for Bitcoin, potentially driving its value upwards throughout October. Markus Thielen, the founder of 10x Research, expressed this viewpoint, although he pointed out that MSTR is currently about 44% pricier compared to Bitcoin.
As a crypto investor, I understand that market makers might be compelled to protect their short gamma exposure due to the calls they probably sold to individual investors. Additionally, hedge funds with a whopping $4.6 billion in short positions on MicroStrategy shares could find themselves under pressure if the share price shoots past the $180 mark. This is according to Thielen’s analysis.
If the price of MSTR stock continues to rise, MicroStrategy might consider borrowing more money to buy even more Bitcoin, since interest in their bonds remains high and each new issue is typically increased in size, according to Thielen’s report.
Thielen mentioned that taking on additional loans to buy bitcoin might make sense. If there’s a surge in MicroStrategy’s stock, it could cause a ‘the dog chases its tail’ situation, where the increase in MicroStrategy’s shares influences Bitcoin’s price in a positive way, creating a self-reinforcing cycle.
Bitcoin Price Faces Rejection at $64,000
This week, the price of bitcoin encountered another refusal at approximately $64,000 and has since moved downwards towards its support zones around $60,000. It seems that significant socio-political occurrences are primarily responsible for capping Bitcoin’s growth potential, despite a broader increase in the global money supply (M2) from $104 trillion in June to $108 trillion in October. The bitcoin price has repeatedly been turned away at the $68,000 resistance level, suggesting that the recent climb to $64,000 was not primarily driven by the U.S. economic situation.
As a crypto investor, I’ve noticed several challenges that seem to be casting a shadow on Bitcoin lately. For instance, the ongoing tension in the Middle East, economic uncertainties globally, and the approaching U.S. presidential elections in November have all been factors that might be causing some turbulence.
Over the past week, the latest employment figures from the U.S. have lowered the likelihood of an economic downturn. This, in turn, has decreased the possibility of another 0.5% reduction in interest rates in November. Consequently, I, as a crypto investor, am anticipating that these higher interest rates will keep us cautious and less likely to invest heavily in cryptocurrencies due to reduced capital inflows.
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2024-10-08 12:32