Bitcoin (BTC) was trading down 0.5% over the last 24 hours at $89,077, 4.5% below its all-time high of $93,434.
Despite this decline, optimism about the cryptocurrency-friendly Trump administration, increased stablecoin inflows to exchanges, steady inflows into spot Bitcoin exchange-traded funds (ETFs), and several on-chain indicators suggest that the bull market is not over yet. suggests.
High Stablecoin Inflows Fueling Bitcoin Rally
Bitcoin’s 17% rise over the past seven days was driven by stablecoins flowing into cryptocurrency exchanges, according to data from market intelligence firm CryptoQuant.
“Stablecoins entering spot exchanges serve as fuel for the market,” anonymous CryptoQuant analyst theKriptolik said in a November 15 Insight note.
The analyst looked at the amount of stablecoins entering spot exchanges to see if the Bitcoin bull market would continue and found that “higher-than-usual stablecoin inflows continue.”
“This means that without additional news flow, the Bitcoin bull market is not over yet.”
ERC-20 stablecoins are flowing into exchanges. Source: CryptoQuant
Historically, price increases have been preceded by large stablecoin inflows into exchanges. For example, prior to the 2021 bull market, there were stablecoin inflows that occurred between September 2020 and February 2021.
Most recently, between January and early March of this year, a large influx of stablecoins into spot exchanges led to a rally in the price of Bitcoin, hitting an all-time high before the halving.
If stablecoins continue to flood exchanges, this would signal investor buying intent and increase demand-side pressure on BTC.
Demand for Bitcoin remains high
The cryptocurrency community believes that Donald Trump’s second term as US president could usher in a new era for the cryptocurrency market.
In a note to investors, QCP Capital expressed confidence that Bitcoin’s fundamental strength represents “a systematic shift in the market in anticipation of Trump’s return.”
The cryptocurrency community is now looking forward to Trump’s fulfillment of his campaign promises and the impact it could have, QCP Capital added.
“His idea to launch a strategic BTC reserve and swap gold for BTC provides a powerful narrative to sustain the BTC price.”
Meanwhile, the Coinbase Premium Index, an indicator that tracks the difference in Bitcoin prices between Coinbase and Binance, hit its highest since April, indicating strong demand in the United States.
The chart below shows that as Bitcoin broke past $90,000 and hit a new all-time high of $93,434, US demand surged, causing the Coinbase Premium Index to surge to 0.13, a level last seen on April 14.
Bitcoin Coinbase Premium Index. Source: CryptoQuant
Massive inflows into US-based spot Bitcoin ETFs evidence the growing demand, with more than $4.7 billion pouring into these investment products following the US election from November 6 to November 13, according to data from SoSoValue.
BlackRock’s Spot Bitcoin ETF (IBIT) accounted for 65.7% of these inflows, recording net inflows of over $3.09 billion over the same period.
Total Spot Bitcoin ETF Flows. Source: SoSoValue
Despite more than $407 million being withdrawn from spot Bitcoin ETFs on November 14, BlackRock’s IBIT still saw inflows of more than $126.5 million, suggesting demand for this ETF remains high.
Now, with the price of Bitcoin rising, traders expect the spot BTC ETF to see more inflows as the market prepares for a new era of cryptocurrencies under the Trump administration.
Bitcoin is not “overvalued” at current levels
Despite Bitcoin’s sharp rise over the past seven days, key valuation indicators show that BTC remains reasonably priced, sparking optimism among investors for a continued uptrend.
The market-to-real value (MVRV) ratio is an indicator used to indicate whether a price is overvalued.
According to data from CryptoQuant, Bitcoin’s MVRV ratio is currently 2.5, indicating that BTC is not overvalued. This is below the critical overvaluation threshold of 3.5, which indicates that the asset is approaching its peak.
However, Bitcoin has room to grow from current levels before reaching overbought territory, suggesting the current rally could continue.
Bitcoin MVRV Rate. Source: CryptoQuant
In addition to the MVRV rate, the on-chain realized price range adds another layer of optimism to the Bitcoin price trajectory.
CryptoQuant’s Trader on-chain realized price bands, which track historical price trends and realized price zones, show that Bitcoin could potentially soon reach the upper band above the current $104,000.
The realized price band reflects the maximum historical valuation level, which indicates that Bitcoin could enter a new phase of price discovery if it breaks through.
Bitcoin Trader Onchain Realizes Price Range. Source: CryptoQuant
The upper realized price range was last reached in March, when Bitcoin reached an all-time high of around $73,835. This historic price action could mean Bitcoin is poised for a similar rally, with the $100,000 level set as a realistic target.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.