In the aftermath of the United States Presidential election, the cryptocurrency market has been in a state of buoyancy, with bitcoin (BTC) leading the charge. Just a week ago, BTC broke its March all-time high (ATH) of $73,737, a rally many attribute to the market’s response to Donald Trump’s election victory. Since then, the crypto asset has consistently been setting new ATHs, its value standing at $87,100 at the time of writing after a recent rejection at $90,000.
Despite this dramatic rise, Bitfinex analysts report a surprising trend among investors – a decrease in profit-taking. This is despite the fact that the volume of profit-taking among BTC investors typically increases when the cryptocurrency trades above the $70,000 mark. This suggests a structural shift in the behavior of investors, with many choosing to hold on to their investments in anticipation of further price increases.
According to the Bitfinex Alpha report, the current wave of new demand in the market is absorbing the minor selling pressure that results from this low level of profit-taking. This indicates a healthier market environment, reflective of increased investor confidence.
Evidence of this fresh demand and heightened investor interest can be seen in the record-breaking inflows into United States Bitcoin exchange-traded funds (ETFs). In just the first three days following the U.S. elections, these products experienced a net inflow of $2.28 billion. BlackRock’s IBIT ETF alone recorded inflows of $1.1 billion on November 7, a sharp contrast to the outflows experienced on November 5 and 6. Analysts suggest these outflows were likely due to investors de-risking prior to the election.
In addition to rising ETF inflows, the Aggregated Spot Cumulative Volume Delta (CVD) metric, which measures spot market buying and selling across major exchanges, has also seen a significant increase. This further emphasizes the growing market buying interest in centralized exchanges.
Furthermore, open interest for Bitcoin futures and perpetual trading pairs has also hit an ATH of $45.43 billion. Bitfinex suggests that although high open interest (OI) levels are usually indicative of speculative leveraged buying, they are not necessarily bearish. As per Bitfinex, “high OI readings are not necessarily bearish and just like price they can be simply adjusting as investors seek the right price point.”
It is this surge in investor interest, coupled with rising institutional participation and newfound demand, that Bitfinex believes makes the market resilient enough to sustain its upward momentum in the near term. This trend is a testament to the increasing maturity and sophistication of the cryptocurrency market and the confidence of its investors.
