As BTC rallies to its yearly high, outflows from Grayscale’s Bitcoin exchange-traded fund (ETF) have slowed while other crypto funds are seeing an uptick in inflows.
Analysts at cryptocurrency exchange Bitfinex have found on-chain data to support a more bullish environment for Bitcoin (BTC), following the asset’s break above the $50,000 level.
According to the latest Bitfinex Alpha report, current on-chain indicators like the Market Value to Realized Value (MVRV) and realized price metrics suggest we are still in the early stages of a bull season.
More Room for Growth
The MVRV ratio analyzes Bitcoin market cycles, particularly identifying tops and bottoms. An MVRV greater than 2.4 indicates the market holds substantial unrealized profits, while a value below 1.0 shows unrealized losses.
The ratio was above its one-year Simple Moving Average for support at writing time. According to historical data, the movement signals the continuation of a major BTC price appreciation phase.
“This crossover essentially reflects a heightened capacity and willingness among holders to maintain their spot positions prior to opting for profit-taking. The tendency for early profit-taking, observed previously, could be ascribed to a kind of post-traumatic stress disorder stemming from bear market experiences, where investors are quick to liquidate positions at the first sign of gains to avoid potential losses,” analysts said.
Besides the MVRV, the short-term holder realized price metric also shows positive signals as this cohort of investors has slowed down in profit-taking, hinting that BTC has more room for growth.
Bitcoin ETFs Accumulate More BTC
As BTC rallies to its yearly high, outflows from Grayscale’s Bitcoin exchange-traded fund (ETF) have slowed while other crypto funds are seeing an uptick in inflows.
Recall that BTC plunged nearly 21% after the ETF approvals last month. The fall was accompanied by large outflows from Grayscale’s GBTC and substantial inflows into the other products.
However, the tide has changed, and investors have slowed down in their sales of GBTC funds. The other nine products now hold 216,309 BTC, surpassing MicroStrategy’s holdings, which began accumulating in August 2020.
Bitfinex expects the inflows to continue as the market anticipates the upcoming Bitcoin halving in April.
“These inflows, coupled with the impending 2024 Bitcoin halving and the sustained high levels of illiquid supply – with more than 70 percent of BTC in the hands of long-term holders – paint an exceptionally bullish picture for BTC price movements,” analysts added.