Did you buy the dip? 3 signs $90K Bitcoin price was the bottom of the area
Bitcoin's retracement of $95,000 from the November 26 low of $90,742 was seen. The recovery has also been felt by the broader cryptocurrency market, with total market capitalization rising 7.3% to $3.32 trillion between November 26 and 28.
Market participants are now looking for a hint that Bitcoin (BTC) has found support at $90,000 before continuing its journey towards $100,000.
Coinbase Premium Index: BTC demand returns
Bitcoin's decline from a new all-time high of $99,655 on November 22 to a weekly low of $90,742 on November 26 may have been associated with lower demand in the United States. That was evident in the sharp decline in the Coinbase Premium Index during that period.
The Coinbase Premium Index measures the price difference between the BTC/USD pair on the largest US exchange, Coinbase, and Binance's BTC/USDT.
The chart below shows that the index went back and rose from -0.0387 to 0.091 on June 26.
Bitcoin Coinbase Premium Directory. Source: CryptoQuant
The rising Coinbase premium is a proxy for increasing interest from US retail investors.
“After the recent price correction, the growth of demand for Bitcoin is increasing rapidly again,” said Julio Moreno, head of research at the onchain analysis platform CryptoQuant, in a statement posted on X on November 27.
Moreno shared a chart showing Bitcoin's apparent demand rising in expansion territory, indicating that new investors are entering the market.
“Expanding demand is what makes Bitcoin go up.”
Bitcoin clear demand; 30 day total. Source: CryptoQuant
Spot Bitcoin ETF earnings flip positive
BTC's ongoing recovery turned positive on November 26, matching new inflows for the US-based space for Bitcoin exchange-traded funds (ETFs).
U.S. spot Bitcoin ETFs returned a daily net inflow of $103 million on Nov. 26, ending a two-day net inflow total of $558 million.
Notably, the Bitwise Bitcoin ETF recorded the largest inflow of $48 million of the day, while BlackRock's IBIT saw no inflows for the first time since November 15.
Bitcoin ETF flow chart. Source: Farside Investors
US spot Bitcoin ETFs have attracted nearly $30.3 billion in net inflows to date.
Further evidence suggests that institutional investors have increased their exposure to digital assets. Bitcoin investment products saw $3.07 billion in inflows, accounting for more than 98% of total inflows at the end of November 22.
It overflows with wealth. Source: CoinShares
This suggests a renewed demand for Bitcoin investment products from institutions, which will be a positive impetus for the BTC price going forward.
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Bitcoin balances on exchanges fall to 6-year lows
While Bitcoin surged to $100,000 while all investors were taking profits, BTC exchange rates continued to decline, according to data from CryptoQant.
Bitcoin volume on exchanges continued to fall below 2.4 million BTC in November, the lowest level since November 2018.
Reserve BTC on exchanges. Source: CrytoQuant
Declining BTC balances on exchanges suggest that there is less supply available to sell as investors move funds elsewhere, such as self-sustaining wallets.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
