By Michael Scott
Bitcoin sustained the recent rally to test above $56,7000 as analysts attribute the surge to the consistency in inflows to the spot Bitcoin exchange-traded funds (ETFs). A review of the market activity as per CoinGecko data shows Bitcoin price rallied 9% to exchange hands at $56,700.89.
The Bitcoin price rally is attributed to the upcoming halving event in late April, where the rewards for the block completed will be reduced by half. The anticipated supply crunch is fueling the price move, with Bitcoin exchanging hands at $56,211.64, 9.6% up in the past 24 hours, per CoinGecko data.
Bitcoin Futures Open Interest Realize Record 26-Month High
The crypto rally is replicating in the Bitcoin futures open Interest (OI), enabling them to test a new yearly high last witnessed in November 2021. The rally portrays surging trading activity around the world’s largest crypto by market capitalization.
A review of data provided by crypto futures trading platform CoinGlass shows that the entire OI for Bitcoin futures hit $24.25 billion at press time 09:11 UTC, the highest ever since the November 11 2021 mark. It illustrates the potential to edge closer to its peak at $23 billion.
Further analysis of Bitcoin futures OI shows a 30% uptrend in 2023, coinciding with a period when Bitcoin has rallied 140% year-to-date to test $56,324.37, as per CoinGecko data. Such levels retrace the Bitcoin prices last witnessed in December 2021.
Open Interest is a metric tracking the entire value of all unsettled Bitcoin futures contracts executed across the exchanges. The higher value signifies increased market activity and rising sentiment around the token.
Sustained Increase in Spot Bitcoin ETF Inflows
The Bitcoin price rally portrays continued bullish sentiment that investors harbour fueled by the surging inflows towards the spot Bitcoin ETFs when gold ETFs suffer higher outflows. Bitcoin has already exceeded the $49,000 price realized following the historic move by the US Securities and Exchange Commission to approve spot Bitcoin ETFs.
The Farside Investors data shows that the Bitcoin ETFs have witnessed a $6.0284 billion net inflow since the trading unveiled on January 11. The Farside Investors data shows that the results would be better save for the Grayscale’s bleeding, leaving GBTC with a net outflow of $7.465 billion. GBTC bleeding is slowing down, with only a $22.4 million outflow on Monday, February 26.
A review of the total weekly inflows by CoinShares indicated that the newly approved spot Bitcoin ETFs realized $2.5 billion in the previous week. Grayscale Investments LLC suffered the largest outflow in the week at $623.3 million, raising its monthly total to $1.365 billion.
BlackRock’s Ishares realized $1.614 billion in weekly flows as per CoinShares data, taking its monthly total to $2.577 billion. Fidelity ETFs attained a $648.6 million weekly flow with a monthly total of $1.286 billion.
CoinShares lead analyst James Butterfill indicated that the recent positive price movement and inflows elevated the ETF assets under management (AUM) above $67 billion – the highest since December 2021.
Tedtalks Macro, in a February 17 financial commentary, acknowledged the net inflow to the spot Bitcoin ETFs was increasing steadily to an average of $182 million daily. The analyst indicated that post-halving will necessitate $25 million in net inflows to the spot Bitcoin ETFs daily to offset the miners’ production.
Analysts point towards the forthcoming halving as fueling increased investors’ Interest in Bitcoin. The halving will reduce the Bitcoin rewards by 50%. The analysts are optimistic about a bullish price, considering that the halving precedes a parabolic uptrend of the event.
Bitcoin Traders Ready for Upcoming Rally
A review of data offered by IntoTheBlock illustrates that Bitcoin traders are readying for the upcoming leg of the present rally. Scrutiny of the In/Out of the Money Around Price (IOMAP) metric indicates that most Bitcoin was bought at an average price of $52,081.
Investors have liquidated some of such Bitcoin to break even, with the majority holding for better prices.
The IOMAP suggests increased resistance above $52,000, echoing the view by independent analyst Ali, who is optimistic of a fierce battle to defend the support zone around $52,000. Bitcoin has already surpassed this zone in a 32.7% rally in the 30-day run, taking its total market capitalization to $1.112 trillion, as per CoinGecko data.