Market ‘Pricing In A Higher Fair Value’ For Bitcoin As Price Discovery Continues
November 13 2024 - 1:30AM
NEWSBTC
Bitcoin (BTC) has performed remarkably over the past week, surging
30% since the November 5 US election. The flagship crypto surpassed
its March all-time high (ATH), recording a new high nearly every
day for the last seven days. Bitfinex analysts noted that the
market remains “relatively stable” despite increased speculative
activity. Related Reading: Bitcoin Closing In On $80,000 For
Record-Breaking Run After Trump Win Bitcoin ‘Fair Value’ Priced In
At Higher Levels Following Donald Trump’s victory last Tuesday, the
crypto market has seen a massive rally, surging to a market
capitalization of $3.05 trillion. Bitcoin has led the post-election
bullish run with a 30% price increase, nearing the $90,000 mark
earlier today. According to Bitfinex Alpha report, the rally
“highlights the positive reaction to the election outcome, with
investors positioning themselves for potential economic stimulus
and regulatory shifts.” During the March highs, BTC’s realized
profit volume reached its peak of $3.1 billion. Since then,
realized profit volumes have gradually decreased, “reaching an
equilibrium.” As the report noted, there’s been a reset in supply
and demand forces, which indicates, alongside the recent price
surge, that “the market is now pricing in a higher ‘fair value’ for
Bitcoin.” At the same time, the cryptocurrency continues its price
discovery. Moreover, profit-taking above $70,000 has been
significantly smaller than the past instances when Bitcoin traded
above this range, despite a structural increase in profit-taking.
Bitfinex analysts consider this to signal the “entry of a new wave
of demand into the market,” backed up by Spot Bitcoin
exchange-traded funds (ETFs) buying post-elections. Additionally,
it suggests that fresh investor interest “could drive further
upward momentum in the near term.” BTC Enters ‘A New Phase’ The
report highlighted record-breaking BTC ETFs’ inflows, around $2.28
billion in three days. This performance represented a significant
increase from the pre-election de-risking, which saw the
crypto-based investment products record their second-largest
single-day outflows. According to CoinShares data, Bitcoin ETFs
closed the US election week with $1.8 billion in inflows and
started this week with $1.1 billion in positive net flow. This
performance displays a resurgence in demand for the flagship crypto
as the market adjusts to BTC’s new price levels. Bitfinex analysts
explained that from March to August, there was significant supply
and insufficient sustained buying pressure to absorb it. The recent
demand surge suggests a notable shift as buying interest is
“absorbing selling pressure at all-time highs and stabilizing
market dynamics: Now we appear to be entering into a new phase
where the volume of profit-taking when BTC hits an all-time high is
notably lower, given the amount of fresh demand entering the market
post-election. This demand is helping to absorb the minor selling
pressure still present, suggesting a healthier market environment
and potential for further upward movement. Related Reading: Solana
(SOL) Records 3-Year High As Price Hits $220, Is $260 Next?
Meanwhile, Open Interest (OI) in Bitcoin futures and perpetual
contracts reached ATH, hitting $45.43 billion. The report explains
that this signals an increase in speculative activity but details
that the market remains “relatively stable” since OI and BTC prices
“are in equilibrium at elevated levels.” Ultimately, Bitfinex
anticipates some consolidation soon, with a potential pullback to
$77,000. A correction toward this level would close BTC’s CME gap
and strengthen Bitcoin’s position to climb even higher levels. As
of this writing, Bitcoin is trading at $86,225, a 5% increase in
the daily timeframe. Featured Image from Unsplash.com, Chart from
TradingView.com
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