Current Market Situation
After a 0.5% drop over the last 24 hours, Bitcoin (BTC) is trading at $89,077, which is still 4.5% below its all-time high of $93,434.
Despite this pullback, there are several indicators suggesting that the bull market is not over yet.
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 CryptoQuant, ‘Stablecoins entering spot exchanges act as fuel in the market.’
The pseudonymous CryptoQuant analyst, theKriptolik, examined the number of stablecoins entering spot exchanges and found that ‘there is a continuation of a higher-than-normal influx of stablecoins.’ This suggests that, barring any additional news flow, the Bitcoin bull market has not yet ended.
Historical Precedents
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 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.
If stablecoins continue flooding exchanges, it would indicate investors’ intention to buy, adding to BTC’s demand-side pressure.
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. In a note to investors, 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.’
QCP Capital added that ‘His idea of launching a strategic BTC reserve and rotation from gold to BTC provides a strong narrative that keeps BTC prices supported.’
Meanwhile, 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.
Increasing Demand
The chart below reveals that 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.
Bitcoin Coinbase Premium Index
Source: CryptoQuant
Increasing demand is evidenced by massive inflows into US-based spot Bitcoin ETFs, with more than $4.7 billion being 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 (IBIT) accounted for 65.7% of these inflows, seeing more than $3.09 billion in net inflows over the same time period.
Total spot Bitcoin ETF flows
Source: SoSoValue
Despite more than $400.7 million being withdrawn from spot Bitcoin ETFs on Nov. 14, BlackRock’s IBIT still experienced more than $126.5 million in inflows, suggesting demand for this ETF remains high.
Now, traders expect that as Bitcoin price grows, spot BTC ETFs will see more significant inflows in the days to come as the market prepares for a new crypto era under Trump’s administration.
Bitcoin is Not ‘Oversold’ at Current Levels
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.
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 the MVRV ratio for Bitcoin is currently at 2.3, which is below its historical average.
CryptoQuant’s Trader On-chain Realized Price Bands, which track historical price trends and realized price zones, show that Bitcoin can potentially reach the upper band currently at $104,000 or higher soon.
The upper realized price band was last reached in March when Bitcoin reached its all-time high of around $73,835. This historical price action could mean that Bitcoin is poised for a similar upward trend, with the $100,000 level as a realistic target.
Conclusion
While there are signs that the bull market may be slowing down, several indicators suggest that it is not over yet. High stablecoin inflows, increasing demand, and reasonably priced metrics all point to a continued upward trend for Bitcoin in the coming days and weeks.
However, every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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