Bitcoin’s rebound: A journey towards $100k and beyond
Bitcoin’s latest rebound from the Nov. 26 local low of $90,742 has seen it reclaim $95,000. The recovery has reached across the broader cryptocurrency market, with total market valuation rising 7.3% between Nov. 26 and 28 to $3.32 trillion.
Market participants are now looking for clues as to whether Bitcoin (BTC) has found support at $90,000 before continuing its march toward $100k.
The role of the Coinbase Premium Index
Bitcoin’s recent drop from its all-time high of $99,655 on Nov. 22 to a weekly low of $90,742 on Nov. 26 may be attributed to a decrease in demand from the United States. This was evident by a sharp drop in the Coinbase Premium Index over that period.
The Coinbase Premium Index measures the difference in pricing between the BTC/USD pair on the largest US exchange, Coinbase, and Binance’s BTC/USDT equivalent.
A closer look at the Coinbase Premium Index
The chart below shows that the index has bounced back, rising from -0.0387 on June 26 to the current value of 0.091.
Bitcoin demand growth is accelerating again after the recent price correction
‘The Bitcoin demand growth is accelerating again after the recent price correction,’ Julio Moreno, head of research at onchain analytics platform CryptoQuant, said in a Nov. 27 post on X.
Moreno shared a chart showing Bitcoin’s apparent demand continuing to rise within the expansion territory, signaling that new investors were entering the market.
The 30-day sum of Bitcoin demand indicates an upward trend, suggesting sustained interest in the cryptocurrency.
Spot Bitcoin ETF inflows flip positive
BTC’s ongoing recovery aligns with renewed inflows for US-based spot Bitcoin exchange-traded funds (ETFs) as they flipped positive on Nov. 26.
The US spot Bitcoin ETFs returned a daily net inflow of $103 million on Nov. 26, ending a two-day streak of net outflows totaling $558 million.
Notably, the Bitwise Bitcoin ETF recorded the largest inflow of $48 million on the day, with BlackRock’s IBIT recording no flows for the first time since Nov. 15.
US spot Bitcoin ETFs have attracted substantial net inflows
The total cumulative net inflows to US spot Bitcoin ETFs reached approximately $30.3 billion by the end of the week ending Nov. 22.
Additional data reveals that institutional investors increased their exposure to digital assets, with Bitcoin investment products witnessing inflows of $3.07 billion, accounting for more than 98% of the total inflows during the week.
These trends suggest a growing preference among investors and institutions towards Bitcoin, further fueling its bullish momentum.
The role of U.S. retail investors
The sharp decline in Bitcoin’s price on Nov. 26 was attributed to a decrease in demand from U.S. retail investors. This is evident from the drop in the Coinbase Premium Index, which measures the difference between Bitcoin prices on Coinbase and Binance.
A positive Coinbase Premium Index indicates that Bitcoin is trading at a premium on Coinbase compared to Binance, suggesting higher demand from U.S. retail investors on platforms like Coinbase.
The importance of support levels
Bitcoin’s recent rise above the $90k level has shown resilience, with analysts suggesting that it may test support at this key resistance level before continuing upward toward its ultimate target of $100k.
If Bitcoin successfully breaks above $100k, the market will witness significant bullish momentum, potentially leading to a further acceleration in its upward trajectory.
Conclusion
Bitcoin’s rebound from the $90k level has shown signs of strength, with broader market trends indicating increasing demand and institutional interest. The Coinbase Premium Index and spot Bitcoin ETF inflows suggest that U.S. retail investors remain active participants in the cryptocurrency market.
As Bitcoin approaches its ultimate target of $100k, it is crucial to monitor key support levels and potential catalysts for further upward momentum.
