Glassnode: Traders confident in Bitcoin reaching new highs
Spot market demand drives Bitcoin rally
Following recent U.S. election results, a wave of optimism regarding Bitcoin swept through the market, fueled by expectations of a more crypto-friendly regulatory environment under the Trump administration.
This surge of confidence led Bitcoin to reach an all-time high (ATH) of $89,956, recorded on Coinbase.
The impact of elections on Bitcoin
Historically, U.S. presidential elections have had a profound impact on Bitcoin’s market performance, as reported by Glassnode. In previous cycles, realized capital—a measure of the cumulative wealth invested in Bitcoin—spiked both before and after elections. Following the Republican victory in 2016, Bitcoin’s price increased by 124.6% over the subsequent months, and after the 2020 election, realized capital inflows surged by over 196%, driving Bitcoin to even greater heights. However, the 2024 election thus far shows a more restrained response in BTC: realized capital has increased by only 2%, while price gains have reached 27.9%.
Role of spot market demand
The current rally has largely been driven by spot market demand, especially through U.S. spot ETFs, which have seen assets under management grow by $6.8 billion over the past 30 days. This inflow has outpaced the growth in CME futures open interest, indicating a strong preference for direct spot exposure. Coinbase’s spot market showed high buyer pressure, with its cumulative volume delta (CVD) nearing peak levels of $143 million, reflecting strong investor interest.
New price discovery phase and potential correction
Bitcoin’s rally has pushed the asset into a new price discovery phase, with over 95% of its circulating supply now in profit. This profitability level historically signals strong market sentiment but also hints at a possible correction based on past patterns. Current realized profit volumes average around $1.56 billion per day, still below the $3 billion per day observed in previous ATH cycles. This suggests that while profit-taking has increased, further growth opportunities may exist if demand continues.
“While realized profits by both short-term and long-term holders have increased, they remain below previous ATH peaks, suggesting that many investors are willing to wait for higher prices,” the report states.
As Bitcoin nears the $94,900 mark, analysts expect intensified sell-side pressure; however, strong demand from spot markets may support the current rally.
Glassnode highlighted that with institutional interest in Bitcoin remaining high, especially from U.S. ETFs, the largest cryptocurrency by market cap may continue its ascent in 2024.
Previously, we reported that the net inflow of USDT to cryptocurrency exchanges reached $1.3 billion on November 12, potentially indicating rising demand for BTC.
