Bitcoin dictates crypto fund flow as on-chain data suggest BTC’s worst may be…

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  • The king coin beat oth­er cryp­tocur­ren­cies per dig­i­tal asset invest­ments in the past week.
  • Despite hit­ting $23,000 on-chain data sug­gest­ed that there could be a fur­ther BTC uptick.

Fol­low­ing a week full of swings and a week­end of greens, Bit­coin [BTC] dom­i­nat­ed oth­er assets per the cryp­to fund inflow, Coin­Shares revealed on 23 Jan­u­ary. Accord­ing to the largest dig­i­tal invest­ment group in Europe, inflows in the region were extreme­ly bull­ish. On the oth­er hand, the Unit­ed States sub­sided in pump­ing liq­uid­i­ty into avail­able invest­ment products.

Read Bitcoin’s [BTC] Price Pre­dic­tion 2023–2024

Notably, the inflow from last week was worth $37 mil­lion, with most of it going into Bit­coin short-invest­ment prod­ucts. While long-term Bit­coin invest­ment prod­ucts account­ed for $5.7 mil­lion, short-peri­od ones were as high as $25.5 mil­lion, with Switzer­land and Ger­many lead­ing the charge. 

Bitcoin digital asset investment flow data

Source: Coin­shares

Despite the hes­i­ta­tion in the U.S., 80% of trad­ing in the region focused on Bit­coin shorts. The rea­son for the inter­est qua­dru­pling in the pre­vi­ous week is not one shield­ed from the pub­lic eye. With BTC hit­ting $23,000, it was almost impos­si­ble for investors not to look toward short-term gains. 

An exit from the hawkish conditions?

Although sev­er­al ana­lysts have opined that Bit­coin was out of the bear­ish cage, Bit­coin doc­u­men­ta­tion spe­cial­ist Cau­con­o­my thought oth­er­wise. As per his Cryp­to­Quant Pub­li­ca­tion, the Puell Mul­ti­ple was exit­ing the red area on 23 January.

The Puell Mul­ti­ple is the ratio of the dai­ly Bit­coin issuance, mea­sured in dol­lars, to the 365-day mov­ing aver­age coins issuance. It also indi­cates a pos­si­ble mar­ket top, mid-cycle or bear­ish condition.

CryptoQuant’s data, cou­pled with Cauconomy’s opin­ion, showed that the Puell Mul­ti­ple was only approach­ing the ini­tial stage of the bull cycle. This negat­ed the cir­cu­lat­ing enthu­si­asm about the mar­ket being ful­ly bull­ish. The ana­lyst also urged cau­tion, not­ing that more price action would be required to con­firm the situation.

Bitcoin Puell Multiple

Source: Cryp­to­Quant

How much are 1,10,100 BTCs worth today?

The halving call for increase

In anoth­er Cryp­to­Quant mar­ket eval­u­a­tion, ana­lyst Oinonen_t men­tioned a strong case for a fur­ther price increase. Refer­ring to the cur­rent mar­ket behav­ior and dis­tri­b­u­tion cycles, he cre­at­ed a chart (below) cen­tered on retail demand and the Bit­coin halving. 

He said: 

“Bitcoin’s his­to­ry is also dom­i­nat­ed by halv­ing events, which are pre­ced­ed by pre-halv­ing accu­mu­la­tion cycles (blue). The shift from accu­mu­la­tion to dis­tri­b­u­tion cycle can be fore­cast­ed by fees to reward on-chain data (white), which has a ten­den­cy to spike before each dis­tri­b­u­tion cycle.”

The ana­lyst fur­ther not­ed that a price increase usu­al­ly fol­lowed the fees-to-reward ratio pre-halv­ing in past cycles. Con­sid­er­ing that the 2024 halv­ing is only a year and some months away, the fees-to-reward ratio showed spik­ing ten­den­cies. Hence, Bit­coin could lean towards anoth­er price increase.

Bitcoin halving and fees to reward ratio

Source: Cryp­to­Quant

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