TL;DR

Bitcoin hits new all-time highs, surpassing $93k, thanks to strong capital inflows from ETFs and spot markets.
Long-term holders (LTH) are starting to sell significantly, with over 128k BTC sold between October and November.
US ETFs absorb over 90% of selling pressure, stabilising the market in the face of increasing liquidity.

Bitcoin has recently hit a new all-time high, surpassing $93,000, driven by an exceptional inflow of capital from exchange-traded funds (ETFs) and spot markets.

In just the last 30 days, over $62.9 billion has been injected into the market, contributing to a high-demand environment, especially for BTC.

This phenomenon presents itself as a repetition of the previous phases of Bitcoin bull cycles, highlighting a notable similarity in the magnitude and duration of past bullish movements.

The dynamics of this rally not only reflect a strong appetite for the digital asset, but also a rotation of capital from traditional assets such as gold and silver towards a younger, more digital asset like Bitcoin.

According to a report by CryptoVizArt, UkuriaOC, and Glassnode, the rising market liquidity is being absorbed primarily by US cryptocurrency ETFs, which have played a pivotal role in absorbing around 90% of the selling pressure from long-term holders (LTH) between October and November.

This reflects an important evolution in the structure of the Bitcoin market, where institutional demand has become crucial to maintaining price stability, especially as LTH behavior begins to lean toward profit realization.

As for LTHs, which hold a significant portion of the Bitcoin supply, they have seen an increase in their unrealized gains, creating notable selling pressure.

Between October 8 and November 13, LTHs sold approximately 128,000 BTC.

This selling behavior has been a typical pattern during the euphoria phases of the cycle, when long-term holders capitalize on their gains.

Despite this movement, the absorption of this pressure by ETFs has prevented an overflow of sales, balancing supply and demand.

Impact of ETFs on the future of Bitcoin

The growth of the Bitcoin market is not only being driven by retail investors, but also by strong institutional participation, especially through ETFs.

These exchange-traded funds have absorbed most of the sales made by LTHs, which has allowed the price of Bitcoin to remain stable even in times of high volatility.

In particular, between October and November, ETFs absorbed more than 128,000 BTC, representing around 93% of the sales made by LTHs.

This behavior has been instrumental in avoiding a significant drop in price, despite increasing selling pressure.

However, the story does not end here. As LTHs continue to take profits, selling pressure is likely to continue to increase, which could test the ability of ETFs to absorb this supply volume.

Despite this, the recent wave of institutional capital , combined with growing demand for cryptocurrencies, suggests that the market could continue to strengthen, even if LTHs continue to sell off.

The importance of ETFs in this context highlights a trend that will likely define the future of the Bitcoin market. Institutional participation, by providing a steady stream of demand, is changing the traditional dynamics of the cryptocurrency market.

In this sense, ETFs have not only been a sales absorption mechanism, but also a key tool to maintain market stability during phases of extreme volatility.

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Filed under: News - @ November 21, 2024 2:21 pm