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Onchain Insights Reveal Increasing Speculation Around Bitcoin

source-logo  coinedition.com 28 February 2024 08:26, UTC

This week’s newsletter from Glassnode revealed that Bitcoin speculation is reaching new heights. Investors are witnessing a surge in speculative activity driven by increasing capital flows, derivatives leverage, and institutional interest.

Source: Glassnode

Bitcoin’s price was hovering around $52000 through the week, and it has managed to retain the majority of its gains since mid-February. The report also showed that this resilience was supported by a significant increase in the realized capital, which climbed by over $30 billion year-to-date to $460 billion. With an average unrealized profit of +120% per coin, investors found themselves in a decent position compared to the early stages of previous bull markets.

Source: Glassnode

Looking into onchain metrics, a shift towards speculation has emerged, particularly among short-term holders (STH). These investors have been consistently depositing over $2 billion daily into exchanges since mid-January, driving exchange volumes to higher levels. Additionally, the inflow of over 90,000 Bitcoin into spot ETFs highlights a growing institutional appetite for the digital asset.

Source: Glassnode

Derivatives markets have reflected this speculative sentiment, with open interest in futures and options markets nearing all-time highs. Along with that, the yield available through futures markets has surged to 14.7%, attracting traders keen on leveraging long positions. Furthermore, the widening spread between BTC and ETH funding rates indicates a growing user preference for riskier assets.

As far as speculation goes, Bitcoin trading veteran Peter Brandt has recently revised his prediction for the current bull market cycle. He believes that Bitcoin’s price will reach $200,000, which is up from his previous prediction of $120,000. This forecast is based on a technical analysis chart that shows Bitcoin breaking above a key channel.

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.