As a seasoned analyst with over two decades of experience in financial markets under my belt, I’ve seen trends rise and fall, bull markets turn bearish, and everything in between. The latest Bitcoin (BTC) rebound from its Nov. 26 low of $90,742 to retake the $95,000 mark is a sight that reminds me of the market’s inherent volatility but also the potential for significant gains.
Bitcoin (BTC) has made a comeback from its November 26 low of $90,742, reaching back up to $95,000. This recovery is not exclusive to Bitcoin, as it’s also been observed in the wider cryptocurrency market. Over the period between November 26 and November 28, the total market capitalization increased by approximately 7.3%, climbing to a value of $3.32 trillion.
Currently, market observers are seeking indications to determine if Bitcoin has established a strong foundation around the $90,000 level, which could then propel it further towards reaching $100,000.
Coinbase Premium Index: BTC demand returns
The decline in Bitcoin’s price from its recent peak of $99,655 on November 22 to a weekly low of $90,742 on November 26 could potentially be due to reduced demand originating from the United States. This is suggested by a noticeable drop in the Coinbase Premium Index during the same timeframe.
The Coinbase Premium Index compares the price gap for Bitcoin traded against the U.S. Dollar (BTC/USD) on the primary American exchange, Coinbase, with the price of Bitcoin paired against Tether (BTC/USDT) on Binance.
The graph indicates a recovery in the index, as it climbed from -0.0387 on June 26 to its present level of 0.091.
A rising Coinbase premium is a proxy for increasing demand from US retail investors.
Julio Moreno, chief researcher at CryptoQuant’s blockchain analysis platform, stated in a November 27 update that the increase in demand for Bitcoin has picked up speed once more following the recent price adjustment.
Moreno displayed a graph indicating that the demand for Bitcoin seemed to be increasing within its growth phase, implying that fresh investors were joining the crypto market.
“Demand expansion is what will get Bitcoin higher.”
Spot Bitcoin ETF inflows flip positive
The continuous growth of Bitcoin (BTC) is mirroring an increase in investments into U.S.-based Bitcoin exchange-traded funds (ETFs), which saw positive inflows starting from November 26.
On November 26th, U.S. Bitcoin Exchange Traded Funds (ETFs) experienced a daily net increase of approximately $103 million, marking the end of a two-day period during which these ETFs collectively saw a net outflow of $558 million.
Significantly, on that particular day, the Bitwise Bitcoin ETF (BITB) saw a significant investment of approximately $48 million, marking a new high. Interestingly, BlackRock’s IBIT didn’t receive any inflows for the first time since November 15.
US spot Bitcoin ETFs have attracted roughly $30.3 billion in cumulative net inflows to date.
It appears that further evidence indicates a rise in institutional investors’ involvement with digital assets. Specifically, bitcoin-focused investment products attracted approximately $3.07 billion, accounting for over 98% of the overall inflows during the period ending on November 22nd.
Institutional interest in Bitcoin investment seems to be reviving, suggesting a potential boost for Bitcoin’s value in the future.
Bitcoin balance on exchanges falls to 6-year lows
Even as Bitcoin approached a value of $100,000, causing all investors to be profitable, the amount of BTC held on exchanges kept decreasing, according to data from CryptoQuant.
In November, the quantity of Bitcoins held on exchanges dropped to a level not seen since November 2018, falling below approximately 2.4 million Bitcoin.
Reducing Bitcoin holdings on exchanges implies there’s less readily available Bitcoin for possible selling since investors seem to be transferring their coins into personal wallets for safekeeping instead.
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2024-11-28 10:15