Bitcoin Hits $76,000 All-Time High ATH

The US presidential election results have fueled Bitcoin’s strong growth as Donald Trump vowed to make Bitcoin the world’s largest reserve asset. In light of the above event, Bitcoin’s on-chain activity is showing staggering numbers and continues to grow strongly as large inflows continue.

11/8/20247 min read

Summary

Last week, Bitcoin reached a new ATH at $76,000 USD, the growth was closely related to the event of Donald Trump being elected as the new US president and this promises to be the hottest news of the year.

The money flowing into Bitcoin assets is huge and continues to increase while the price of gold has had deep corrections, money flowing into digital assets shows that the demand for storage is increasing in this market.

Profit-taking has increased significantly, but realized losses remain relatively low. This shows that although the decision to take profits right at the new Bitcoin ATH price zone has not yet maximized profits, most investors are still holding their positions to protect their investment assets.

Compared to the sharp decline in the previous season, the current period has not shown good growth value of the market and investment sentiment is still very optimistic.

According to data from Deribit, Bitcoin options trading volume also increased by 1 million contracts over the past week, suggesting that investors are preparing for greater volatility in the coming period.

With a significant increase in demand, capital inflows into Bitcoin, and expectations of volatility, analysts believe that Bitcoin could continue to maintain its bullish momentum in the coming time.

So what is the real growth in the cryptocurrency market? Will Bitcoin stop or continue to move to a new ATH? Let's analyze with HCCVenture some on-chain indicators that are showing strong signals in the Bitcoin network!

On-chain metrics

The cryptocurrency market has experienced a relatively gloomy Q2 and Q3 and has been moving sideways for many months, Bitcoin has now reached a new ATH at the price of 76,000 USD, setting a new number for the cryptocurrency market throughout the history of Bitcoin. Many analysts believe that: "Donald Trump will bring Bitcoin to the peak of this cycle if he sits in the position of US president". The above event has also had a certain impact on the sudden price growth of Bitcoin when in less than 3 days, Bitcoin has grown to over 8,000 USD.

According to recent polls, Trump’s approval rating in the upcoming elections is increasing, which has clearly had a positive impact on market sentiment. Investors believe that his policies could support economic growth and reduce uncertainty, thereby increasing Bitcoin’s appeal as a safe-haven asset.

After surpassing $73.7k, Bitcoin quickly pushed its price to $76.1k. According to data from exchanges, about 30% of the trading volume came from new investors, showing that new capital is pouring into the market, pushing the price higher.

Bitcoin’s breakout to a new ATH is a positive sign for the crypto market, reflecting the asset’s strong movement amid political turmoil. New capital inflows, bullish sentiment, and a period of price discovery could shape Bitcoin’s momentum going forward.

Since the end of Q3, the net capital inflow into Bitcoin has been growing significantly. The demand for capital allocation of STH and LTH has been increasing. This not only reflects the profit-taking strategy of traders in the context of a strong market.

According to our data, the total net inflow into Bitcoin this month has grown to around $5 billion, indicating a significant increase in new investments from investors.

The fact that Bitcoin Realized Cap has increased by 3.5% in the past month shows that the overall value of Bitcoin is being recognized in the financial market. Meanwhile, reaching an ATH total capitalization of 656 billion USD further proves the strong position of Bitcoin in the investment portfolios of many organizations and individuals.

Profit-taking amid strong markets shows that traders are taking advantage of higher prices and that many investors are feeling more confident in holding their assets.

In addition, if Bitcoin continues to maintain its upward trend and attracts more investors, capital flows into the crypto market in general and Bitcoin in particular will likely increase strongly in the near future.

The profit-taking wave that erupted at the historic peak in March has culminated with a peak realized profit volume of +$3.1 billion. This shows that investors took the opportunity to take profits after a long period of growth.

Over the past seven months, as the market digests this volatility, the volume of realized profits has fallen by 45% from its March peak, while the volume of realized losses has also fallen by 30%. This suggests a complete reset of supply and demand forces in the market, indicating that a correction has taken place, creating a foundation for sustainable growth in the future.

At the same time, we can see a structural increase in profit-taking activity, which has recently begun to re-emerge. Specifically, in October, profit-taking volume increased by 20% compared to the previous month, reaching about $1.5 billion, indicating that investors are returning to profit-taking amid increased market pressure.

The market is currently in a profit-dominated mode, with realized profits outstripping losses by approximately 47 times. This reflects the supply holding losses becoming increasingly thin as the market rallies and breaks through new all-time highs.

This increase is supported by data showing that around 60% of recent transactions have been driven by institutional investors, which could lead to a potential recovery in asset prices in the near term. Recognizing these signs could provide attractive investment opportunities for savvy investors, as trading volumes have also increased by 15% compared to September.

We can also see a significant increase in profit taking volume, with an increase of +$635 million per day.

While this is a significant amount compared to the excitement the market experienced near the top of previous bull cycles, the increase is still relatively modest. In particular, in a context where average daily trading volume can reach billions of dollars, this profit-taking represents only a small fraction of total trading.

This shows that, while there is an increase in profit-taking activity, investors remain positive, with no signs of a major sell-off. Compared to previous cycles, where profit-taking volume was often many times higher than current levels, this growth shows that the market is still in the process of accumulation and stabilization.

Over the past month, Bitcoin exchange-traded funds (ETFs) in the US have seen significant demand, with a strong wave of inflows that has been no less successful than the product launch period.

However, it seems that investors have reduced their risk ahead of the US presidential election, which is reflected in the notable capital withdrawals in the last 3 days. Specifically, during this period, about $ 200 million was withdrawn from Bitcoin ETFs, showing the cautious sentiment of investors in the current unstable political context.

However, with the formation of a new all-time high (ATH), ETFs may see a new wave of demand and momentum chasers looking for opportunities in the next bull run. It is predicted that if the political situation stabilizes after the election, the recovery in ETF inflows could restore strength to the Bitcoin market, especially as investors are expecting a prolonged uptrend in the future.

Options trading volumes are also rising, now at $2.9 billion, second only to the peak in March and the yen-carry correction on August 5. This again highlights the growing presence of institutional investors who are using complex financial instruments to express their views on the market.

The increase in options trading volume not only reflects the interest of large investors, but also shows that they are looking for strategies to manage risk and optimize profits in volatile markets. Specifically, the use of options allows investors to flexibly adjust their positions and take advantage of price fluctuations, thereby maximizing investment opportunities.

Looking at the ratio of open interest allocated to call and put options, it is evenly split in both directions. This suggests that investors and speculators have been hedging and betting on large market moves in both directions.

This balance reflects a wait-and-see attitude among investors, who may be preparing for future uncertainty. The high open interest for both calls and puts suggests that the market is on alert and ready for the possibility of a sharp move, either up or down.

Evaluation and Conclusion

Taking the above analysis into account, Bitcoin has hit a new all-time high after the US presidential election, trading above $75,000 for the first time this week. This move is supported by a modest inflow of around $2.5 billion per month, suggesting the potential for further growth amid a continued influx of new demand.

As demand continues to grow, coupled with expectations of volatility in options, the market appears to be ready for further volatility. Currently, the ratio of open interest in calls to puts is in balance, suggesting that investors are preparing for the possibility of large moves in both directions.

Additionally, the volatility risk premium (VRP) reached 27.9%, reflecting the extreme volatility profile priced into the options market and reflecting the cautious yet opportunistic investor sentiment. The fact that only 1.4% of trading days recorded a higher VRP suggests that investors are willing to take on potential risk while still seeking profit in a rapidly changing market.

In summary, with positive capital inflows, increased demand, and expectations of volatility, the Bitcoin market is likely to continue to make further advances in the coming period. The growing presence of institutional investors and high open interest also support this, creating an attractive investment environment for those willing to participate in potential future volatility.

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Data from: data by HCCVenture

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