What does this mean? (Bitfinex)

About a week ago, bitcoin (BTC) broke its March all-time high (ATH) of $73,737, as the crypto market got excited about Donald Trump’s victory in the US presidential election. Since then, the crypto asset has recorded a new ATH almost every day; it was worth $87,100 at the time of writing after being rejected at $90,000.

Despite this spectacular rally, investors are not so interested in taking profits. Bitfinex analysts reported that the volume of profit-taking among BTC investors is significantly lower than in previous instances when the cryptocurrency has traded above $70,000, although there has been a structural increase in profit taking

Investor profit taking is low

According to the Bitfinex Alpha report, fewer investors are taking profits. Still, the current wave of fresh demand in the market is absorbing the lesser selling pressure, pointing to a healthier market environment.

The new demand and high investor interest can be seen in flows into US Bitcoin exchange-traded funds (ETFs), which hit an all-time high last week. These products recorded a total of $2.28 billion in net inflows in the first three days after the US election.

BlackRock’s IBIT alone saw inflows of $1.1 billion on November 7, following two days of outflows on November 5 and 6. Analysts say the outflows were likely driven by investors reducing risk ahead of the election. On November 11, ETFs collectively saw inflows of $1.12 billion, with IBIT accumulating more than $763 million.

This spike in spot buying interest after the election is also reflected in the Aggregate Spot Cumulative Volume Delta (CVD) metric, which indicates the buying/selling of the spot market on major exchanges. This metric has increased significantly, highlighting the market’s growing buying interest in centralized exchanges.

BTC to continue upward momentum

In addition to increased ETF inflows and spot market purchases on exchanges, open interest in Bitcoin futures and perpetual trading pairs has reached an ATH of $45.43 billion.

“As we have indicated in previous editions of Bitfinex Alpha, high OI levels are often interpreted as a sign of a large amount of speculative leveraged buying, however, high OI readings are not necessarily bearish and, of just like price, they can simply adjust as investors search for the right price,” Bitfinex said.

Bitfinex says this increased investor interest, increased institutional participation and new demand make the market resilient enough to continue the upward momentum in the near term.

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