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Bitcoin (BTC) recently surpassed the $50,000 mark for the first time since December 2021 and has remained higher, currently trading above $51,900. Analysts at on-chain intelligence platform CryptoQuant attributed the asset's surge to strong demand from recently approved spot Bitcoin exchange-traded funds (ETFs).
According to the latest CryptoQuant Weekly reportan estimated 75% of new funds invested in BTC come from ETFs, excluding Grayscale's GBTC.
Bitcoin ETFs are behind the rise of BTC
As new money enters the market, Bitcoin's market cap has reached $1 trillion, with realized capitalization reaching $454 billion, falling below its all-time high of $468 billion from April 2022 The realized capitalization measure measures the amount of money invested in the primary market. ecosystem.
The increase in realized capitalization signals demand ahead of major catalysts like the upcoming Bitcoin halving in April, indicating a bullish outlook for the medium term.
It is worth noting that the amount of new money flowing into Bitcoin is increasing at the highest annual rate since mid-2022. The realized cap has also increased by $71 billion over the past year, a sign of increased investment flows and a potential rise in the price of BTC.
The impact of spot Bitcoin ETFs on BTC demand is evident in the substantial share of new flows entering the market via the products. Analysts found that $9.5 billion, representing 2% of the total money historically invested in Bitcoin, entered through ETFs.
“This is positive for price gains as long as the current rate of demand for Bitcoin from these ETFs continues, but it may pose a risk if demand declines or we start to see outflows from these ETFs,” CryptoQuant said .
BTC Short-Term Price Target
As BTC continues its surge, CryptoQuant has set the asset's short-term price target at $56,000 based on the valuation of network activity. Analysts believe that the target level represents the Metcalfe Price Valuation Band, a metric that assesses the price of BTC based on the addresses of active users.
The Metcalfe Band reported a resistance level in April and November 2021 and April 2022, indicating a risk of a correction around these prices at the time.
At the same time, the price of BTC could rise further, as unrealized profit margins are still low, hovering around 17%, compared to 30-40% when the ETFs began trading a month ago.
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