You can probably feel it, see it, hear it. Crypto markets are higher. We haven’t reached new all-time highs but, boy, are we close! I went to sleep thinking it might happen overnight and woke up to the next best thing.
As a reminder, the all-time high is $64,800. The high of this session is $64,400 and we’re currently closing a tad over $64,400. Honestly, we might breach all-time high as I’m filming this.
What’s driving the current enthusiasm? Essentially the same narrative that’s prevailed in the past few weeks: Bitcoin ETFs. Right now, BITO (the BTC Futures ETF) had its first trading day, with about $1 billion trading.. That’s the second biggest ETF debut. Of course, it’s almost like a self-fulfilling prophecy: people are buying because of the ETF and because prices are due to go up people are buying the ETF which in turns pushes prices higher and so on.
In any case, a whole lot of people that didn’t have exposure to BTC before now do. That’s big.
You can see the BTC dominance continue to grow, as BTC keeps on outperforming altcoins. But, it’s worth noting that I’m hearing talks of ETH now. Almost as if the BTC ETF was done already and people would now be looking at the next asset that could be offered as an exchange-traded fund. If that’s the case, it would interestingly follow the cycles we’re used to, meaning BTC leads, ETH follows, then alts ramp up.
Now, to look at some charts, it’s interesting to see the BTC exchange netflows going from negative to positive. By the way, that’s not a bullish signal, it actually means people are depositing to exchange (presumably to sell) rather than taking off (presumably to hold). That being said, we’re essentially in neutral mode and that’s in line with rising prices and the fact that we’re close to all-time high. It’s worth keeping an eye on, though, in case it starts to go too positive (people depositing more than withdrawing).
Another chart from Glassnode shows us the 90-day realised profit and loss ratio and shows the reversal from more realised losses to now profits, which seem to say: we’re done with the capitulation of the May-June time and back on an uptrend, potentially a new leg up and into price discovery.
This my attempt at trying to offer a balanced view. Ultimately, though, I remain -as always- decidedly bullish. There’s so much capital flowing through and most of the selling seems easily absorbed by the market.
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