Key Points
- Bitcoin’s recent price dip has led to increased uncertainty and caution among investors.
- Despite this, Bitcoin Futures demand has surged to levels not seen since September 2023.
Bitcoin’s recent rally sparked hope of new highs. However, after a brief spike to $73k, the cryptocurrency dipped below $70,000. This suggests a trend of profit-taking, with potential uncertainty looming in November.
The question remains, will Bitcoin bulls regain control or is this the start of a significant pullback? A recent CryptoQuant analysis showed robust buying pressure from Bitcoin Futures whales.
Bitcoin Futures Demand Surges
The last time Futures demand was this high was in September 2023. After this, Bitcoin embarked on a bullish run until April. The increase in Bitcoin Futures could align with bullish expectations among Futures investors. However, BTC demand has slowed significantly in recent days.
For instance, there was a surge in Bitcoin Spot ETF inflows over the past week. However, the last day of October saw the week’s lowest inflows.
Investors Proceed with Caution
The sudden drop from institutional buyers (ETFs) indicates a shift towards caution. This reflects recent price and demand dynamics. Bitcoin exchange flows hit a peak on 31 October, significantly higher than outflows on the same day.
However, exchange flows have since fallen, with inflows still significantly higher than outflows. This suggests that sell pressure has outweighed demand, leading to the price dip.
The market has also shown a decrease in leverage appetite over the past two days. This indicates that investors are uncertain about the extent of the recent retracement. This is because the latest wave of bullish optimism has many expecting higher prices in the coming weeks.
Bitcoin’s Open Interest also dropped significantly, indicating that derivatives traders are also exercising caution. Both the Estimated leverage ratio and the Open Interest metrics previously hit their highest 2024 levels towards the end of October.
Investors’ caution may be due to the expected volatility of the U.S elections. This means that Bitcoin could resume normal supply and demand activity post-election. The election outcome may also influence demand levels. This, combined with the surge in Futures, could lead to extremely volatile movements.
