Bitcoin (BTC) is expected to experience some short-term price volatility following the options expiry at the end of the week. Recent analysis from a CryptoCrypto report suggests that the increase in exchange reserves may trigger a round of selling pressure.
Based on the MVRV metric, Bitcoin currently faces a critical resistance level that, if breached, could lead to a significant uptrend in prices. Breaking the 155-day moving average barrier could pave the way for a rally similar to the previous uptrend that commenced in October.
An examination of the Bitcoin spot ETF flow table reveals a positive trend in total flows over the past fortnight. This underscores the optimistic sentiment prevalent among retail investors.
Furthermore, the 30-day net change in holdings has turned positive, as highlighted by Ki Young Ju in a recent post on X platform.
Rising Buying Pressure in the United States Fueled by Spot ETF
The Founder and CEO of CryptoQuant observed a steady increase in the U.S. Bitcoin reserve ratio, likely propelled by the growing demand for spot ETFs. This upward trend has been consistent but gradual over the last fourteen months.
Historically, a rapid surge in the U.S. reserve ratio occurred a few months before Bitcoin entered the final phase of its bull market cycles.
If this pattern repeats itself, a sudden spike in the U.S. reserve ratio could signal the early stages of a potential BTC bull run.
Notably, the reserve ratio typically starts to decline around 4-6 months before the market cycle peaks. While past trends do not guarantee a similar outcome this time around, it serves as a noteworthy aspect for investors to monitor closely.
Bitcoin’s Coinbase Premium Indicates Unsaturated Demand
The data on spot ETF flows and reserve ratios illustrates the rising demand for Bitcoin in the U.S.
However, an analysis of the Coinbase Premium Index suggests that this demand has not yet reached a level that would warrant a significant premium.
Coinbase, a major cryptocurrency exchange for U.S. users, typically experiences a considerable Bitcoin premium during bullish market phases, as witnessed during the 2020-21 and subsequent rallies.
Furthermore, this trend persisted during the October 2023 to March 2024 resurgence.
The relatively low Coinbase premium does not contradict the earlier findings but rather reinforces the notion that a full-fledged bull market may not be imminent.