In the recent period, the global digital currency market has witnessed a substantial increase in its total worth, exceeding $60 billion.
This surge has been predominantly driven by the resurgence of Bitcoin, which has once again surpassed the $64,000 threshold, reigniting positive sentiments among investors.
Despite the attention this rally has garnered, some experts are raising concerns about the sustainability of this growth, pointing out certain unconventional trends underlying the current market conditions.
Asian Capital Influence Outshines U.S. Participation?
An analyst at CryptoQuant, known by the alias BQYoutube, recently brought to light a crucial observation on the platform’s QuickTake feature.
In a post titled “Ascending Trend Sans Coinbase Participation,” the analyst highlighted the absence of activity from the U.S. market, specifically represented by Coinbase, in the recent upsurge.
BQYoutube pointed out that while Bitcoin’s valuation was climbing, Coinbase Premium, a metric gauging the price disparity between Bitcoin on Coinbase and other platforms, was plunging into the negative terrain.
This descent in the Coinbase Premium indicates a lack of fervor within the U.S. market towards the ongoing rally, potentially dampening the overarching bullish sentiment.
According to BQYoutube, one of the key driving forces behind Bitcoin’s recent escalation might be the influx of capital from Asia. The analyst proposed that the rate cut in China and the surge in Asian investments could be propelling the prices skyward.
Nonetheless, such a surge may lack robust support without substantial U.S. participation.
The U.S. market historically plays a pivotal role in sustaining prolonged Bitcoin price upswings, and its non-involvement could hint at vulnerabilities in the current price trajectory.
BQYoutube warned that the rally’s sustainability could be compromised if the U.S. market remains distant, as sustained price momentum typically hinges on widespread global engagement.
Modest Rekindling of Public Interest in Bitcoin
Beyond these observations, it is imperative to delve into Bitcoin’s fundamental on-chain metrics for a holistic overview.
Statistics from Coinglass showcase a dip in Bitcoin’s Open Interest, denoting the overall count of active derivative contracts.
This metric has dwindled by 0.83%, touching the figure of $33.25 billion.
In a similar vein, Bitcoin’s Open Interest volume, representing the total trade count, has also witnessed a sharp 31.04% decline, pegged at $45.49 billion presently.
These declines potentially signify reduced optimism among traders regarding the asset’s near-term performance.
Another critical parameter to monitor is the number of active Bitcoin addresses, a crucial gauge of public interest.
Insights from Glassnode unveil a notable fall in active Bitcoin addresses over recent months, particularly after hitting a peak of 839,000 on August 30th.
This decline saw the count plummet to around 600,000 by the end of September, indicating a wane in retail interest.
However, recent data hints at a slight recovery, with active addresses climbing back above 700,000 in recent days.
While the prevailing surge has sparked enthusiasm, the limited U.S. involvement and declining open interest levels could pose challenges for Bitcoin’s short-term trajectory.
Nevertheless, the uptick in retail interest may suggest a resurgence of confidence in the market.