GetBlock Magazine - What happened? According to analysts at the custody company Copper, the current fluctuations in the Bitcoin exchange rate above $66,000 indicate a potential short-term peak, while on-chain indicators indicate that the market is overheating.
What else do we know? According to Copper's report, 98% of wallet addresses are currently profitable, based on the price at which the asset was last transferred. Historically, a sharp increase in the share of profitable wallets has led to selling pressure as investors look to lock in profits.
Analysts say this could signal that the market is experiencing a temporary upswing ahead of the US elections.
As for Bitcoin spot exchange-traded funds (ETFs), overall enthusiasm for these products remains low despite significant inflows.
Since the launch of Bitcoin ETFs in January 2024, total inflows into them have exceeded $21 billion. However, after seven days of inflows (October 11-21), the overall result for 11 funds turned negative on Tuesday, October 22.
“Markets have certainly responded to seven days of capital inflows, with Bitcoin prices breaking $69,000 for the first time since July. However, from a growth perspective, something seems amiss. The start of the year saw significant daily ETF gains, something that has not been seen in the markets recently,” the report notes.
At the same time, ETC Group analysts noted the strongest growth in demand for Bitcoin since April. The upcoming presidential elections in the United States are also named as the main factor, Trump's chances of winning in which have increased significantly, which has a positive effect on the crypto sector.
However, ETC Group also noted another factor driving the growth in demand for Bitcoin: the rise in risk appetite in financial markets in general. Last week, the US stock market and gold prices hit new record highs, signaling that investors are becoming more willing to take risks.
In addition, concerns about the growing US budget deficit may push investors to use Bitcoin as a safe haven asset. Since the beginning of September, the US national debt has increased by almost $500 billion.
“We believe that the combination of limited Bitcoin supply, global monetary policy shifts, and positive seasonality in Q4 will provide strong support to crypto assets in the coming months,” ETC Group analysts said.
