High Stablecoin Inflows to Fuel Bitcoin Rally
Bitcoin’s 17% uptick over the last seven days was accompanied by an influx of stablecoins into cryptocurrency exchanges. According to data from market intelligence firm CryptoQuant, ‘stablecoins entering spot exchanges act as fuel in the market.’ The analyst examined the number of stablecoins entering spot exchanges and found that there is a continuation of a higher-than-normal influx of stablecoins.
Historical Data Supports Current Trends
Historically, price rallies have been preceded by large-scale inflows of stablecoins into exchanges. For example, the 2021 bull run was preceded by an influx of stablecoins that occurred between September 2020 and February 2021. Most recently, high stablecoin inflows into spot exchanges occurred between January and early March this year, resulting in a rally that saw Bitcoin’s price break previous all-time highs before the Bitcoin halving.
Demand for Bitcoin Remains High
The crypto community believes that Trump’s second term as president of the United States could usher in a new era for the crypto market. QCP Capital expressed confidence that the underlying strength in Bitcoin represents a ‘systematic shift in the market in anticipation of Trump’s return to office.’
Trump’s Campaign Promises and Their Implications
The crypto community is now looking forward to Trump’s fulfillment of his campaign promises and their possible implications. QCP Capital added, ‘His idea of launching a strategic BTC reserve and rotation from gold to BTC provides a strong narrative that keeps BTC prices supported.’
Increasing Demand Evidenced by Coinbase Premium Index
The Coinbase Premium Index, a metric that tracks the Bitcoin price difference between Coinbase and Binance, has hit its highest level since April. This indicates strong US demand.
US Demand Surges as Bitcoin Storms Past $90,000
As Bitcoin stormed past $90,000 to set a new all-time high at $93,434, United States demand surged, pushing the Coinbase Premium Index to 0.13, levels last seen on April 14.
Massive Inflows into US-Based Spot Bitcoin ETFs
Increasing demand is evidenced by massive inflows into US-based spot Bitcoin ETFs. More than $4.7 billion has been poured into these investment products after the US presidential election between Nov. 6 and Nov. 13, as per data from SoSoValue.
BlackRock’s Spot Bitcoin ETF Sees Significant Inflows
BlackRock’s spot Bitcoin ETF (IBIT) accounted for 65.7% of these inflows, seeing more than $3.09 billion in net inflows over the same time period.
BTC Remains Reasonably Priced
Despite Bitcoin’s sharp rally over the last seven days, key evaluation metrics indicate that BTC remains reasonably priced, raising optimism among investors of a continued upward move.
Market Value Realized Value (MVRV) Ratio
The market value realized value (MVRV) ratio is a metric used to indicate whether the price is overvalued or not. Data from CryptoQuant shows that Bitcoin’s MVRV ratio is currently at 2.5, which indicates BTC is not overvalued.
Onchain Realized Price Bands Add Another Layer of Optimism
The onchain realized price bands add another layer of optimism to Bitcoin’s price trajectory. CryptoQuant’s Trader On-chain Realized Price Bands show that Bitcoin can potentially reach the upper band currently at $104,000 or higher soon.
Historical Price Trends and Realized Price Zones
The realized price bands reflect the maximum historical valuation levels, indicating that Bitcoin could enter a new price discovery phase if it breaks through them. The upper realized price band was last reached in March when Bitcoin reached its all-time high of around $73,835.
Conclusion
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
