The recent comments made by Federal Reserve chair Jerome Powell at the Jackson Hole symposium have sparked a surge in the demand for bitcoin (BTC) in the United States. However, this increased interest seems to be confined mainly to BTC, as the overall demand growth in the cryptocurrency market remains at low levels. According to a report by CryptoQuant, BTC witnessed a rally due to the rising interest from U.S. investors, leading to a spike in the Coinbase Premium to 0.11%. This surge in the premium level indicates that there is a higher demand for BTC among local investors compared to those outside the U.S. It is also a sign that BTC is flowing from non-U.S. exchanges to Coinbase, a movement typically observed during bull markets and suggestive of an upward trend in bitcoin’s price.
Market Trends and Indicators
The Inter-exchange Flow Pulse (IFP) metric, which measures the one-year cumulative sum of BTC net flows between Coinbase and other exchanges, also experienced a rally in response to the increased demand for bitcoin in the U.S. This movement reflects the flow of assets into the U.S.-based crypto platform due to the rising price premium and higher demand within the country. Furthermore, the perpetual futures market saw an increase in bitcoin demand, accompanied by a spike in Open Interest (OI) by approximately 10,000 BTC to 276,000 BTC. This surge in OI signifies that traders are opening new long positions, with buy orders outweighing sell orders. Consequently, the price of bitcoin experienced a 6% uptick, reaching $65,000, its highest level since August 2.
Investor Behavior and Profit-Taking
Despite the price rally, investors did not engage in significant profit-taking, as seen in realized profits amounting to $536 million. This figure is considerably lower than the multi-billion dollar profits recorded during previous local market peaks this year. Additionally, the Apparent bitcoin Demand 30-day growth has declined from 496,000 BTC in early April to a negative state of 36,000 BTC. The Apparent Demand metric calculates the difference between the daily total bitcoin block subsidy and the daily change in the number of BTC not moved in a year or more. CryptoQuant emphasizes the need for an increased apparent bitcoin demand in the market for prices to fully recover and make new highs.
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