BTC refreshed all-time high during last night’s New York session, rallying to a peak of $93,480. The move came after US headline and core inflation matched expectations at 2.60% and 3.30% respectively. Market is currently pricing in 82.5% chance of a 25bps cut in the upcoming December FOMC meeting.

As of this morning, crypto up has pushed the global market cap of crypto above $3 trillion, above its 2021 peak of $2.77 trillion.

Where are we going from here?

In view of Bitcoin’s impressive rally since the US election, our view is that $100,000 – $120,000 may not be too far off. As we prepare for the next move up, it is important to note the following trends and risk factors:

Implied vols have been falling on the move up as many large players were positioned for it and sold calls into the rally. With each new high, our desk observed market is selling calls and buying puts to hedge their downside risk.

Market remains extremely leveraged especially in alts. Heavy leverage buying has pushed perp funding up to 50-100%, especially for alts. The risk of deleveraging may be quite significant.

We believe that the underlying strength in BTC represents a systematic shift in the market in anticipation of Trump’s return to office. His idea of launching a strategic BTC reserve and rotation from Gold to BTC, provides a strong narrative that keeps BTC prices supported.