Bitcoin (BTC) continues its impressive upward trajectory, reaching an all-time high (ATH) of $93,000. The surge was driven by strong capital inflows, totaling $62.9 billion over the past 30 days, according to Glassnode. These inflows are mainly due to increased demand in exchange traded funds (ETFs) and spot markets.
Capital inflows and market dynamics
Since the start of November, Bitcoin has consistently set new ATHs, reflecting a pattern reminiscent of previous cycles between 2015-2018 and 2018-2022. This consistency provides insight into Bitcoin’s macro price behavior and market structure. Historical data suggests that bull markets can last anywhere from 4 to 11 months, which provides a framework for analyzing the current market.
Bitcoin’s market capitalization soared to $1.796 trillion, surpassing major global assets such as silver and Saudi Aramco. The cryptocurrency now trails Amazon by just 20%, marking a potential next milestone among the world’s most valuable assets.
The Role of ETFs in Market Stability
The ETF absorbed about 90% of the selling pressure from long-term holders (LTHs) during the recent surge. This highlights the growing importance of institutional buyers in maintaining market liquidity and stability. From October to mid-November, ETFs saw weekly inflows of $1 billion to $2 billion, supporting significant institutional demand.
Nonetheless, recent data shows that LTH sell-side pressure is starting to outpace ETF inflows, similar to the pattern seen in early 2024. These imbalances can lead to increased market volatility.
Impact on long-term holders and markets
Long-term holders have played a pivotal role in the current market dynamics, with 128,000 BTC sold between October 8 and November 13. This activity is common because LTH tends to profit when prices are good. The Net Unrealized Profit/Loss (NUPL) indicator currently stands at 0.72, indicating that sentiment is still being gauged and there is potential for further market growth.
Bitcoin price has surpassed the +350% profit band, sparking significant profit taking among LTHs. Historically, this phase marks the beginning of a severe bull market and could potentially lead to further price increases.
conclusion
The recent Bitcoin rally, fueled by significant capital inflows and institutional demand, highlights the changing dynamics of the cryptocurrency market. The market is poised to continue growing, although the balance between LTH selling and ETF buying remains to be seen in the coming months, as ETFs play a key role in absorbing sell-side pressure.
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