What Does This Mean? (Bitfinex)

About a week ago, bitcoin (BTC) shattered its March all-time high (ATH) of $73,737 as the crypto market got excited about Donald Trump’s win in the United States presidential elections. Since then, the crypto asset has recorded a new ATH almost every day; it was worth $87,100 at the time of writing after it was rejected at $90,000.

Despite this dramatic rally, investors are not so keen on taking profits. Bitfinex analysts reported that the volume of profit-taking among BTC investors is significantly lower than in previous instances where the cryptocurrency has traded above $70,000, even though there has been a structural increase in profit-taking.

Investor Profit-taking is Low

According to the Bitfinex Alpha report, fewer investors are taking profit. Still, the current wave of fresh demand in the market is absorbing the minor selling pressure, highlighting a healthier market environment.

The fresh demand and high investor interest can be seen in flows into the United States Bitcoin exchange-traded funds (ETFs), which hit a record high last week. These products saw a total of $2.28 billion in net inflows within the first three days after the U.S. elections.

BlackRock’s IBIT alone recorded inflows of $1.1 billion on November 7, following two days of outflows on November 5 and 6. Analysts say the outflows were likely driven by investors de-risking before the election. On November 11, the ETFs collectively saw inflows of $1.12 billion, with IBIT amassing more than $763 million.

This increased spot buying interest post-elections is also reflected in the Aggregated Spot Cumulative Volume Delta (CVD) metric, which indicates spot market buying/selling across major exchanges. This metric has increased significantly, highlighting the growing market buying interest in centralized exchanges.

BTC to Continue Upward Momentum

In addition to rising ETF inflows and spot market buying on exchanges, open interest for Bitcoin futures and perpetual trading pairs have hit an ATH of $45.43 billion.

“As we have indicated in previous editions of Bitfinex Alpha, high OI levels are often interpreted as showing a high amount of speculative leveraged buying, however, high OI readings are not necessarily bearish and just like price they can be simply adjusting as investors seek the right price point,” Bitfinex stated.

Bitfinex says this surge in investor interest, rising institutional participation, and newfound demand makes the market resilient enough to continue upward momentum in the near term.