After Trump’s victory, Bitcoin continues to surge, reaching new all-time highs. However, many are concerned that an overheated market might lead to a price correction. Yet, several analysts indicate that there are no signs of an overheated Bitcoin market at present.
(Previous context:
Bitcoin soared 1900% during Trump’s first term! Can BTC reach $1 million this time?
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(Background supplement:
JPMorgan: Trump’s inauguration will drive Bitcoin to “soar for 8 weeks,” dual benefits of BTC-friendly commitments and tariff policies
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Table of Contents
Analysts: No signs of an overheated market
Bitcoin funding rates “remain almost unchanged”
Bitcoin spot ETF inflows reach a new high
The U.S. presidential election concluded with Republican candidate Trump winning the 47th U.S. presidency by a margin of 295 to 226 votes. Due to his several public endorsements of Bitcoin before the election, BTC experienced a celebratory rally, with its price soaring from $69,000 to $75,000 on the 6th and breaking through $76,000 early this morning (8th), continuously setting new historical highs.
As Bitcoin keeps reaching new heights, many investors believe the market sentiment is overly FOMO, and the crypto market might face a correction soon. However, according to a report by Cointelegraph, several analysts have stated that currently, there are no signs of an overheated market.
Alex Thorn, Head of Research at Galaxy, pointed out in a market report released yesterday:
On the same day, Aurelie Barthere, an analyst from crypto analysis firm Nansen, expressed a similar view:
Furthermore, Thorn noted that although the growth of Bitcoin’s Open Interest (OI) sometimes raises concerns about volatility, the current funding rates show that traders are optimistic about Bitcoin’s prospects, with buyers willing to pay fees to hold long positions.
According to data from Coinglass, Bitcoin’s open interest is at an all-time high, yet the funding rates across exchanges are positive, indicating that the contract market continues to be bullish on Bitcoin. (However, the author believes that a majority being long does not necessarily signal a bullish trend, as it also means that when the main force dumps, it is more)
Positive funding rate:
Longs (bulls) pay the funding rate to shorts (bears), indicating a market sentiment leaning towards optimism.
Negative funding rate:
Shorts pay the funding rate to longs, meaning market sentiment is leaning towards pessimism.
Bitcoin funding rates across exchanges
Bitcoin open interest
On the other hand, according to data from Sosovalue, Bitcoin spot ETF saw the highest single-day net inflow since its listing yesterday (7th), with a total net inflow of $1.38 billion, marking the first time since March 12th that net inflows have surpassed the $1 billion level.
Bitcoin spot ETF net inflows and outflows
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JPMorgan: Trump’s inauguration will drive Bitcoin to “soar for 8 weeks,” dual benefits of BTC-friendly commitments and tariff policies