As Bitcoin continues with its bullish sentiments and is on the cusp of breaking its November 2021 record of reaching the $69,000 mark, here a five critical metrics that are building up this optimism.
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The most crucial aspect of the Bitcoin open interest surge is its potential effect on the futures funding rate which is at a multi-month high at 0.0136%. This crypto metric hasn’t shown such positive results since Bitcoin reached the $71,950 level on June 7. This positive funding rate typically signals bullish market sentiment, although caution is warranted given the volatile nature of crypto markets.
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On October 15, the Bitcoin open interest touched $19.8 billion was an all-time high on all crypto exchanges which shows an influx of capital as crypto investors get interested in the price movements. Although a high open interest sounds optimistic, it doesn’t ensure bullish movement. It could also mean increased volatility in the crypto market.
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The third metric to watch out for is the reduction in Bitcoin supply across crypto exchanges. Centralized exchanges have experienced a 20% decrease in BTC, from an all-time high of 3.37 million in July 2021 to 2.68 million BTC at present, indicating that investors prefer to hold the digital asset instead of selling it.
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There has been a growing demand for spot Bitcoin ETFs which speaks of the institutional interest in the digital asset. In the last 7 trading days, positive flows have been observed in US spot Bitcoin ETFs for 4 days with the best inflow of $555.8 million seen on October 14. This sustained institutional adoption could provide a solid foundation for Bitcoin's continued growth.
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The monthly Relative Strength Index (RSI) for Bitcoin suggests potential for significant upside, with some analysts projecting a possible peak around $233,000 in the current bull run. Additionally, Bitcoin's price recently rose above the crucial 200-day simple moving average (SMA) at $63,335, a level that has historically preceded parabolic moves.
All these metrics illustrate a rosy picture for the future of the cryptocurrency but the trajectory depends on external factors as well as the volatility of the crypto market. However, the convergence of these positive indicators suggests that Bitcoin may be well-positioned for substantial growth in the coming months.
Disclaimer: This article offers educational only information; it should not be regarded as legal or financial advice. When handling bitcoin assets, always do your own investigation or speak with a professional.