The recent increase in demand for Bitcoin (BTC) in the United States, spurred by Federal Reserve chair Jerome Powell’s comments at the Jackson Hole symposium, has sparked interest in the cryptocurrency. Despite this surge in demand, the overall growth trend for Bitcoin has been relatively low and even negative in recent weeks. It is important to note that the rise in Bitcoin demand from U.S. investors has been significant, as shown by the spike in the Coinbase Premium reaching 0.11%, its highest level since July. This spike suggests that local U.S. investors are showing a higher interest in BTC compared to investors on exchanges outside the country.
The increase in demand for Bitcoin from U.S. investors is further evident through metrics such as the Inter-exchange Flow Pulse (IFP) and Open Interest (OI) in the perpetual futures market. The IFP metric, which measures the one-year cumulative sum of BTC net flows between Coinbase and other exchanges, has rallied significantly. This movement indicates that Bitcoin is flowing into U.S.-based platforms like Coinbase due to the price premium and heightened demand in the U.S. Moreover, the OI in the perpetual futures market saw a spike of approximately 10,000 BTC, reaching 276,000 BTC. This spike suggests that traders are opening new long positions, with buy orders outnumbering sell orders.
Following the increased demand for Bitcoin in the U.S., the price of the cryptocurrency experienced a 6% uptick, rising from $60,000 to $65,000, its highest level since early August. Despite this price rally, investors did not engage in significant profit-taking actions. Realized profits only amounted to $536 million, a stark difference from the multi-billion dollar profits seen during previous market highs this year. This lack of profit-taking behavior indicates that investors are still optimistic about Bitcoin’s potential for further price appreciation.
However, the overall Apparent Bitcoin Demand growth over a 30-day period has been declining, shifting from 496,000 BTC in early April to a negative value of 36,000 BTC currently. Apparent Demand is calculated as the difference between the daily total Bitcoin block subsidy and the daily change in the number of BTC that have not been moved in a year or more. CryptoQuant emphasizes that the crypto market needs to see a significant increase in Apparent Bitcoin Demand before prices can fully recover and reach new highs. This indicates that while there is currently a surge in U.S. demand for Bitcoin, there are underlying challenges that may hinder sustained growth in the cryptocurrency’s value.
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