"BTC will reach $40,000 – if not even $45,000 – by the yearend. The cryptocurrency has more than doubled this year, with prices rising nearly 40% in the previous four weeks alone," Research Head at Crypto Services Provider Matrixport and Founder of Analytics Portal DeFi Research Markus Thielen said.
The recent bullish action spurred demand for call options or derivatives, giving the purchaser the right to snap up the underlying asset at a predetermined price later, coindesk.com reported.
"We have two enormous options expiries on November 24 and December 29 with $3.7 billion and $5.4 billion open interest outstanding. There are 85% more calls outstanding than puts, with the 40,000 strikes having the most significant open interest."
The closer we get to $40,000, the more people will have to buy bitcoin to hedge themselves, Thielen noted.
The inflation rate, however, has markedly slowed in recent months, having reached as high as 9.1% in June last year. Data released Tuesday showed the US Consumer Price Index (CPI) climbed 3.2% in the 12 months through October, following September’s 3.7% rise.