Net capital flows into spot Bitcoin ETFs have strengthened despite the exit-induced GBTC from Grayscale canopy coin offering. Glassnode came to this conclusion.
The Bitcoin market continues to show resilience, recovering from the initial sell-the-news drawdown following ETF approvals.
In particular, the market is working through the significant supply overhead created by investors rebalancing capital out of the GBTC product since its… pic.twitter.com/e9Lfwc2zbN
— glassnode (@glassnode) January 30, 2024
Experts noted the similarity of the current bull market with its predecessors in 2016-17 and 2019-20 in the context of dynamics relative to the previous ATH.
The difference is the lower amplitude of the pullback (20.1%) versus 23.6% in 2016-17, and 50% versus 61.8% in 2019-20.
As potential support, analysts suggested the “cost” of purchase for short-term investors ($38,400) and the True Market Mean Price indicator developed jointly with ARK Invest ($33,300) – cost basis model for active players.
According to experts, the latter metric acts as the “center of gravity,” often distinguishing bull markets from bear markets.
To assess the degree of capital outflow and the duration of recovery, experts used the realized capitalization indicator.
At the time of writing, the indicator remained just 5.4% below its previous ATH of $467 billion, experiencing strong capital inflows. The duration of the acceleration in the current recovery was noticeably slower than in previous cycles – 0.05% versus 0.09–0.22%. Analysts attributed this to oversupply due to complex trades such as the GBTC arbitrage.
Decline AUM GBTC was valued at 115,600 BTC. At its peak in early 2021, the product raised 661,700 BTC.
The turbulence caused by the ETF did not provoke the hodlers to take active action. Coin sales have intensified from holders of one- and two-year-old coins, while supply metrics for “older” Bitcoins have only slightly retreated from ATH.
Despite increased volatility, on-chain activity has declined. The daily number of active addresses for economic entities fell to a cyclical low of 221,000.
“This is largely the result of a surge in activity related to Ordinals and “inscriptions”when many participants reuse Bitcoin addresses,” — experts explained.
Daily on-chain transfer volumes remain “extremely high” at $7.7 billion. According to experts, the discrepancy with “active entities” highlights the increased presence of large institutions in the market. Average transaction volume increased to $26,300 per transaction.
Against the background of speculation caused by ETFs, the indicator sent to CEX coins for profit-taking purposes increased to $3,100 per transaction. The value is in line with the peak levels of the April 2023 rally, but remains well below the $10,500 level of the 2021 bull market euphoria.
Let us remind you that JPMorgan allowed Bitcoin to stabilize after GBTC sales were exhausted.
Earlier, a technical analyst under the nickname Ali illustrated the price patterns of the last two cycles of the first cryptocurrency and allowed the coin’s rate to fall further. He does not rule out a drawdown to $32,700.
Prior to this, ex-CEO of BitMEX Arthur Hayes also said that in the short term, Bitcoin could fall to $35,000 amid “excessive” inflation.
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