Inflows Suggest This Rally Has Legs (Core Strategy Rebalance)
Institutional Capital Back in the Fold
It took 10 months, but BTC finally made it to the lower bound of our forecasted range for the year ($35k - $44k). The past week has been remarkable for crypto markets, marked by a notable divergence from traditional financial markets. This breakaway may portend a shift in investor sentiment, potentially signaling increased confidence in digital assets as an independent asset class.
In any market rally, it's crucial to scrutinize various indicators to assess the rally's sustainability. One common pitfall is overestimating the momentum of a rally that is merely driven by short squeezes or event-driven trades. To avoid this, we focus on multiple metrics, including trading volumes in both spot and futures markets, stablecoin flows, changes in realized cap, and flows into Exchange-Traded Products (ETPs).
What stood out significantly this week was the flurry of trading activity on the CME. As the preferred trading venue for U.S. institutions, a surge in CME volumes usually signifies that institutional investors are actively speculating on Bitcoin.
Data reveals that futures open interest on the CME spiked to an all-time high when denominated in BTC. This surge in trading volume points to a more robust rally compared to previous one...Unlock this article by joining our Community!
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