Bitcoin (BTC) recently rebounded from a local low of $90,742 on November 26 to regain $95,000. A recovery was witnessed across the broader cryptocurrency market, with the overall market value rising 7.3% from November 26 to November 28, reaching $3.32 trillion.
Market participants are now looking for clues as to whether Bitcoin has found support at $90,000 before continuing its march towards $100,000.
Coinbase Premium Index: BTC Demand Returns
Bitcoin’s recent decline from an all-time high of $99,655 on November 22 to a weekly low of $90,742 on November 26 may be due to declining demand in the United States. This was reflected in the sharp decline in the Coinbase Premium Index over the same period.
The Coinbase Premium Index measures the price difference between the BTC/USD pair on Coinbase, the largest US exchange, and the BTC/USDT equivalent on Binance.
The chart below shows that the index has rebounded from -0.0387 on June 26 to the current value of 0.091.
Bitcoin Coinbase Premium Index. source: CryptoQuant
The rise in Coinbase premium signals increased demand from U.S. retail investors.
“Bitcoin demand growth is accelerating again after the recent price correction,” Julio Moreno, head of research at on-chain analytics platform CryptoQuant, wrote in a post to X on November 27.
Moreno shared a chart showing that Bitcoin’s apparent demand continues to grow within its expansion zone, indicating that new investors are entering the market.
“Expanding demand will push Bitcoin higher.”
Bitcoin’s clear demand; Total for 30 days. source: CryptoQuant
Spot Bitcoin ETF inflows turn positive
BTC’s continued recovery coincides with new inflows into the US-based Bitcoin spot exchange-traded fund (ETF), which reversed to positive on November 26..
U.S. spot Bitcoin ETFs recorded daily net inflows of $103 million on November 26, marking the second day in a row with total net outflows of $558 million.
In particular, Bitwise Bitcoin ETF (BITB) recorded the largest inflow on this day at $48 million, and BlackRock’s IBIT had no inflow for the first time since November 15.
Bitcoin ETF Flow Chart. source: farside investor
U.S. spot Bitcoin ETFs have accumulated net inflows of approximately $30.3 billion to date.
Additional data shows that institutional investors have increased their exposure to digital assets. Bitcoin investment products saw inflows of $3.07 billion, accounting for more than 98% of total inflows during the week ending November 22.
Flow by asset. source: Coin Share
This indicates a renewed preference for Bitcoin investment products from institutions, which tends to be a positive catalyst for BTC price appreciation in the future.
relevant: Bitcoin demands $95,000 recovery as 6-digit BTC price call returns.
Bitcoin balances on exchanges have fallen to their lowest level in six years.
Even as Bitcoin rose towards $100,000 when all investors took profits, BTC balances on exchanges continued to fall, data from CryptoQant shows.
Bitcoin volume on exchanges continued to fall below 2.4 million BTC in November, the lowest level since November 2018.
The exchange’s BTC holdings. source: CrytoQuant
Decreasing BTC balances on exchanges mean there is less supply available for potential sales as investors move their funds elsewhere, such as self-custodial wallets.
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.