Bitcoin (BTC) is beginning to show promising signs of upward momentum for the first time since June, as it strives to decisively surpass the $69,000 mark and transition into what could be described as a “euphoric bull market.”
In the latest edition of Glassnode’s “Week Onchain Newsletter,” it was noted that Bitcoin’s recent rally has led to a breakthrough of significant technical and on-chain price levels. This surge has pushed many investors back into profitable positions, potentially enhancing overall market sentiment.
The AVIV Ratio, an important on-chain metric that evaluates the unrealized gains and losses of active investors, remains positive, indicating that profitability is holding strong despite recent market challenges. This metric also suggests there may be further growth potential as Bitcoin seeks to evolve from an “enthusiastic bull market” phase to a “euphoric bull market,” characterized by a sustained movement above its previous all-time high.
Reclaiming Important Indicators
The recent price increase allowed Bitcoin to surpass both the 200-day and 111-day moving averages, which are critical indicators for many investors. Additionally, the 365-day simple moving average (SMA) has proven to be vital support during various macroeconomic events, emphasizing Bitcoin’s resilience as it continues its upward trajectory.
Analysis of Fibonacci retracement levels indicates that Bitcoin has remained within an unusual trading range for several months, reflecting a period of consolidation instead of the typical dramatic spikes or sell-offs. Glassnode also reported a significant acceleration in net capital inflows, which have surged by $21.8 billion over the past month, elevating Bitcoin’s realized market cap to an all-time high of $646 billion.
Institutional Investors Embrace ‘Cash and Carry’ Strategies
The derivative markets for Bitcoin are also witnessing considerable growth, with open interest in perpetual and fixed-term futures contracts reaching a record $32.9 billion. The presence of institutional investors is underscored by the CME futures contracts, which alone have seen $11.3 billion in open interest. These regulated derivatives provide institutional participants with opportunities to engage in yield-generating strategies, such as cash-and-carry trades.
Despite this institutional involvement, overall trading volumes in the futures market remain relatively low, indicating that the market has not yet experienced a substantial increase in trading activity. However, with yields from cash-and-carry strategies currently around 9.6%—nearly double that of short-term US Treasuries—interest from institutional investors in Bitcoin is likely to grow, especially as the Federal Reserve hints at possible rate cuts in the near future.
Additionally, continued inflows into spot Bitcoin ETFs and CME futures markets point to a rising trend among institutional traders adopting long-spot and short-futures strategies to capture yield. This shift could enhance Bitcoin’s liquidity and solidify its role as a significant asset within both retail and institutional investment portfolios.