Bitfinex Report: Digital Asset Market May Be Entering Bull Run
Cryptocurrency exchange Bitfinex has released a report suggesting that the digital asset market could be entering a bull run. The report highlights several factors, including Bitcoin’s rise to the $35,000 range and increasing institutional interest in the leading digital asset.
Bitcoin’s Surge and Mass Liquidations
Bitcoin’s surge to $35,000 on October 23 resulted in a series of mass liquidations. A total of $275 million worth of short trades were wiped out on that day, followed by an additional $153 million the next day. These liquidations were the largest seen since January 2023, and the price reached had not been seen in 17 months.
The market also experienced over $200 million in long liquidations as Bitcoin retraced its steps during the upward movement.
Furthermore, short-term holders of Bitcoin, who have held the asset for less than six months, realized significant profits. The short-term holder Spent Output Profit Ratio reached its highest level since April 11, indicating that these investors took the largest amount of profit since April.
“A significant proportion of investors are now in the green, yet long-term holder profit-taking is minimal. This kind of action is typical after a sharp uptick in a bull market and is often followed by a phase of sideways movement or correction,” Bitfinex explained.
Institutional Involvement in Bitcoin
As Bitcoin continues its ascent, institutional interest in the digital asset is growing. Bitcoin options monthly volume on the Chicago Mercantile Exchange is expected to reach $2 billion by the end of October, its highest-ever reading. Additionally, options open interest is gradually recovering and currently stands at $1.15 billion per month, nearing its all-time high of $1.69 billion.
On-chain data also suggests that Bitcoin’s upward momentum could continue into November. Historical data shows that in six out of ten instances, the bullish trend in October extended into November, indicating a 60% chance of a repeat pattern.
Hot Take: Digital Asset Market Poised for Bull Run
The Bitfinex report indicates that the digital asset market may be on the verge of a bull run. With Bitcoin’s surge to $35,000 and the significant liquidations that followed, coupled with increasing institutional involvement, the market is showing strong potential for further upward movement. However, it is important to note that after a sharp uptick in a bull market, sideways movement or correction is often observed. Nonetheless, the current indicators suggest positive prospects for the digital asset market in the near future.
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