As Bitcoin rises above $100,000, investors tend to liken this rally to the short-term rally back in January, but recent data and market momentum suggest that this rally has stronger foundations.
Financial conditions, one of the fundamental indicators determining the market's risk appetite, this time show a favorable picture for Bitcoin. While the dollar index (DXY) has decreased by 9% from 109 in January to 99.60, the yield on 10-year US Treasury bonds has dropped from 4.8% to 4.52%.
These soft conditions are creating a more favorable environment for risk assets. Although the yield on 30-year bonds has risen above 5%, this development is viewed positively for inflation-hedging assets like gold and Bitcoin.
The total market value of stablecoins pegged to the US dollar, such as USDT and USDC, has broken records, reaching $151 billion. This is an increase of about 9% from the average of $139 billion during the December-January period. The presence of a large reserve of capital that can be invested is seen as a positive signal for the Bitcoin and cryptocurrency market.
The recent price surge of Bitcoin from $75,000 is largely due to the buying momentum from institutional investors through spot ETFs.
Open interest in Bitcoin futures on CME has risen to $17 billion, the highest since February, but still below the peak of $22.79 billion in December. Meanwhile, total inflows into spot Bitcoin ETFs have reached $42.7 billion, surpassing $39.8 billion in January.
Previously, during Bitcoin's peak, there was speculative excitement around memecoins like Dogecoin (DOGE) and Shiba Inu (SHIB). However, currently, there is no significant volatility or bubble effect in such altcoins. This indicates that the market is moving more cautiously this time.
There is demand for long positions (bullish) in the perpetual futures market of Bitcoin, but the funding rate remains much lower than the December peak, indicating that leveraged positions are not being abused and the market has not yet 'heated up'.
