Crude oil prices saw an increase on Friday, rising more than 3% compared to the previous trading session. Over the week, both Brent and WTI crude benchmarks experienced notable gains, with Brent rising by around 6.20% and WTI up by 6.30%.
The surge in oil prices came in response to escalating tensions in Ukraine. Following Ukraine’s use of US-made ballistic missiles and British cruise missiles against Russian targets, President Vladimir Putin declared that Russia would continue to deploy its newly developed hypersonic missiles in combat, with a stockpile available for immediate use.
On Monday, crude oil prices dropped by over $2 per barrel after reports surfaced that Israel and Lebanon had reached an agreement to end their ongoing conflict with Hezbollah. The price drop was largely driven by expectations of a ceasefire, even though the conflict had not directly impacted oil supply. Moreover, the geopolitical risk premium surrounding the situation had already been relatively low before the price adjustment.
It is also important to highlight that both Brent and WTI contracts saw their largest weekly gains since late September, propelling them to their highest settlement levels since November 7th.
Going forward, Azerbaijan’s Energy Minister, Parviz Shahbazov, hinted that OPEC+ might extend its current output cuts beyond January 1, 2025, during their upcoming meeting on Sunday, December 1, 2024. The oil alliance has maintained production limits throughout the year due to concerns about weak global demand for oil.
On Tuesday, oil prices continued to slide, extending the previous day’s losses in a volatile trading environment. The primary factor driving this decline was the ceasefire agreement between Israel and Hezbollah, which helped lower the geopolitical risk premium tied to oil prices.
Ahead of their Sunday meeting, OPEC+ members are also discussing whether to delay an anticipated increase in oil production, which had been planned for January. This decision will be crucial in shaping oil policy for the early months of 2025.
In another development, a new concern has emerged from the US; the President-elect has proposed a 25% tariff on all imports from Mexico and Canada, including crude oil. This has stirred anxiety within the energy sector, especially as Canadian crude exports to the US— about 4 million barrels per day—play a significant role in meeting American energy needs. The American Petroleum Institute has underscored the importance of maintaining a smooth flow of energy products across the border.
Bitcoin unexpectedly dipped below $92,000 on November 25, after facing an 8.2% pullback over four days following its all-time high of $99,609 on November 22. This decline resulted in $250 million in liquidations of bullish leveraged positions, but it did not trigger panic or push key metrics into bearish territory. The recent price correction should not be seen as a trend reversal, but rather as a reflection of temporary excessive leverage among derivatives traders.
To understand whether Bitcoin’s failure to break the $100,000 mark impacted investor sentiment, it’s essential to assess the activity of Bitcoin miners. Collectively holding about 1.8 million BTC—worth over $166.3 billion—miners release 3.125 BTC per mined block. Recent data shows that miners have been reducing their positions at a rate of around 2,500 BTC per day, equivalent to $231 million. Meanwhile, U.S. Bitcoin spot exchange-traded funds (ETFs) saw an average daily inflow of $670 million between November 18 and November 22.
Some may blame miner selling for Bitcoin’s inability to surpass the $100,000 threshold, but this explanation falls short. For instance, MicroStrategy announced a $5.4 billion Bitcoin acquisition on November 25, highlighting strong institutional demand.
Long-term holders have also contributed to selling pressure. Historical patterns show similar behaviour in late March, when failed attempts to breach the $73,500 mark led to profit-taking by some whales, sparking a two-month correction that bottomed at $60,830 on May 1.
If historical trends hold, Bitcoin’s price could bottom around $82,500—a typical 17% correction from its all-time high—without signalling a bear market. For context, during the correction between March 14 and May 16, U.S. spot Bitcoin ETF holdings saw little change, and MicroStrategy made a single purchase of 24,400 BTC.
While it’s unclear whether institutional players will maintain their acquisition pace, news of Microsoft shareholders reportedly discussing a similar strategy further supports market confidence.
If whales and arbitrage desks expect a sharp price decline, hedging costs will rise, pushing the put-to-call ratio above 6%. A key metric to watch is the 25% delta skew, which typically ranges between -6% and +6% in neutral markets. A skew outside this range signals heightened fear or excessive optimism.
Data from the options market shows that bullish sentiment observed between November 16 and November 26 has faded. Put (sell) and call (buy) options now trade at similar premiums, suggesting a shift to neutral sentiment. However, on-chain metrics and derivatives show no signs of stress, indicating that Bitcoin’s outlook remains bullish.
The current dip in price is not unexpected, as traders who bought around $60,000 are likely taking profits ahead of the year-end holidays. For newer traders unfamiliar with bull and bear cycles, it’s advisable to exercise caution and avoid rushing into trades.
On the other hand, Ethereum has reclaimed its position as the top blockchain for Tether (USDT), surpassing Tron on November 21, with the gap continuing to widen. Ethereum’s USDT supply increased by 9.3%, while Tron’s fell by 1.5%, putting Ethereum ahead for the first time since August 2022. The total USDT supply across all blockchains stands at a record high of $132.9 billion, with Ethereum holding $60.3 billion compared to Tron’s $58.1 billion, according to DefiLlama.
Ethereum’s role as the primary chain for tokenising U.S. dollar-backed real-world assets has bolstered its position. Tron, known for its low-fee, high-speed network, remains a popular choice in high-inflation countries, where people save in USDT.
Ethereum’s position was further solidified on November 23 when Tether minted $2 billion USDT on Ethereum compared to $1 billion on Tron. BNB Chain, Arbitrum, and Avalanche round out the top five, with $4.58 billion, $3.09 billion, and $1.31 billion in USDT supply, respectively.
The growing stablecoin supply may indicate that many are waiting for a favourable opportunity to re-enter Bitcoin and Ethereum at lower prices, anticipating potential profits once volatility peaks post-Trump’s inauguration. Traders should proceed with caution as this period of volatility unfolds.
