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Source: CryptoVizArt, UkuriaOC, Glassnode; Compilation: Deng Tong, Bitchain Vision
summary
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This article explores Bitcoin’s recent record highs and analyzes the factors driving this upward momentum, especially the strong demand for perpetual futures in the spot market.
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We analyze the impact of the recent U.S. election on inflows of institutional funds, highlighting how open interest in U.S. spot ETFs and CME futures futures are soaring as spot holding strategies become increasingly popular.
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The ATH discovery phase is evaluated, focusing on the percentage of supply in profits and the market dynamics that accompany profitability exceeds 95% over the long term.
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We delve into on-chain cost-based Bollinger bands to track demand momentum, explaining how close to these Bollinger bands predict periods of strong market demand.
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Finally, we examined the realized profit levels and noted that profit-taking activity was significant, but indicated that the current level was still below the previous ATH peak, indicating that there is still room for continued growth.
Soar after the election
After the results of the U.S. presidential election were released, people agreed that the Trump administration would adopt a more friendly cryptocurrency stance, and the cryptocurrency market sent positive signals to push Bitcoin to a record high.
This chart shows the pullback from ATH paired with various fiat currencies and gold (XAU).It is worth noting that the BTC:TRY (Turkish Lira) pair took the lead in setting ATH on June 26, 2024, ahead of other pairs.On November 6, 2024, nearly all BTC Forex pairs hit new highs, except for BTC: Gold.
Historically, the U.S. presidential election has had a significant impact on Bitcoin’s market performance, with both price and actual market value (representing the cumulative wealth invested in the Bitcoin network).
2016 General Election (Republican Party):
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Capital surged 20.3% before the election and 55.5% after the election.
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Prices rose 34.7% before the election and soared 124.6% in the months since the election.
2020 General Election (Democrats rule):
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Real capital inflows increased by 16.5% before the election and 196.3% after the election.
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Prices rose 35.4% before the election, and prices soared 306.8% after the election.
2024 General Election (Republicans, so far):
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Capital growth was achieved 13.3% before the election and slightly increased by 2% after the election.
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Prices rose 10.1% before the election and 27.9% after the election (so far).
therefore,The current cycle reflects a milder, though still very optimistic response before the previous few elections.The market is currently adapting to changes that crypto policies may occur in the coming years.
Bitcoin continues its recent all-time high, setting its biggest weekly trend ever, with a surge of $116,000.This rebound has greatly exceeded the historical weekly trend, almost five times the statistical upper limit (1 standard deviation), indicating thatThe bullish momentum is unprecedentedly strong.
This abnormal price movement reflects optimism in the market, and participants see the expected regulatory environment as a catalyst for ongoing capital inflows.
Spot-driven breakthrough
The chart highlights the daily cumulative volume increment (CVD) of the Coinbase spot market, showing a significant increase in buyer pressure.Recently, daily spot CVD reached $143 million, close to the previous high of $152 million set on March 13.
Every bitcoin rise has been accompanied by a strong increase in Coinbase buyer interest since July, indicating strong demand in spot markets, one of the largest exchanges in the U.S.This continued interest among investors shows that market participants are increasingly optimistic about digital assets and reinforces the spot-driven nature of the current rise.
Following strong buyer pressure on the Coinbase spot market, the recent rebound has also ushered in a large amount of capital flowing into U.S. spot ETFs, with assets under management increased by $6.8 billion in the past 30 days.This increase exceeded the $7.6 billion increase in CME futures open contracts, indicatingInvestors are clearly inclined to invest spot through ETFs.
The correlation between ETF inflows and CME open contracts highlights the dominance of spot holding strategies.However, stronger demand for ETFs highlights investors’ shift to direct spot investment during this market rally.
Typically, the ongoing demand for spot market momentum is accompanied by similar positive momentum in perpetual contract futures.The recent peak premium in the perpetual contract market – reaching $1.59 million per hour on November 12 (7-day average of $392,000 per hour) – reflects strong speculative demand.
However, this level is still below the mid-March high, strengthening the assumption that the current rebound is more of a spot-driven assumption.The moderate but significant demand in the perpetual contract market highlights that spot demand rather than leveraged speculation is the main force in the price surge so far.
Price discovery stage
Bitcoin has entered a new price discovery phase, and all circulating supply is beginning to make profits.This chart shows the percentage of profitable supply, and more than 95% of consecutive profit days per month.
Historically, these euphoric phases lasted about 22 days before adjustments occurred, pushing more than 5% of supply below the original acquisition price.The current rebound has maintained this high profit level for 12 consecutive days, highlighting strong market sentiment, but also suggesting possible future adjustments based on past patterns.
The chart examines cumulative realized profits in the new ATH discovery phase, highlighting the scale of profit-taking activity.Historically, profits achieved between $30 billion and $50 billion per month before demand drys up, often heralding a cooling-off period.
at present,Since entering the latest ATH discovery phase, we have observed a profit of $20.4 billion.Although the profit-taking scale is large, it is still below the historical peak, indicating that there is room for further uptrend before potential demand dry up.
Discover phase bands
As we enter the new ATH discovery phase, it becomes crucial to identify the most effective price model to deal with this high market activity.This chart shows the cost basis for new investors and the upper and lower limits of statistics (±1 standard deviation).
During the ATH discovery phase,As new investors enter at higher prices, the price of Bitcoin will usually approach and test the cap many times, driven by strong demand momentum.Currently, Bitcoin is priced at $879,000, slightly below the cap of $949,000.Monitoring the proximity of these bands, especially the upper and middle limits, can highlight periods of strong market demand and reflect the enthusiasm of new capital to enter the market during the rebound phase.
Currently, the spot price of Bitcoin is $879,000, which is below the upper limit of $949,000.Monitoring the proximity of these bands, especially the upper and middle bands, can highlight when strong demand slows down and when prices are high enough that many existing holders can increase seller pressure.
The average profit has been realized at present is approximately US$1.56 billion per day, with long-term holders contributing US$720 million, accounting for 46% of the total.
Despite increased profit-taking activity, the total profit realized was approximately half of the recorded periods of previous cyclical ATH (breaking over $3 billion per day, with more than 50% of which are attributed to long-term holders).This again shows thatIf demand continues to flow in, there may be room for further upside and more seller pressure is required before reaching typical profit peak levels.
in conclusion
This article analyzes Bitcoin’s recent historical highs, driven mainly by strong demand in the spot market, mainly through U.S. spot ETFs.After the election, institutional investor interest surged, with a large amount of money flowing into Chicago Commodity Exchange (CME) futures and ETFs, benefiting spot exposure and pushing Bitcoin into a new ATH discovery phase.Currently, more than 95% of the circulation supply is in profitable state, and there are usually a large amount of profit-taking subsequently.
Currently, almost all BTC circulation supply is in profitable state, despite a significant increase in profit-taking activity.While both short-term and long-term holders have increased their real profits, they are still below their previous highest levels, which may indicate that many investors are willing to wait for higher prices.
