The recent comments made by Federal Reserve chair Jerome Powell at the Jackson Hole symposium have sparked an increase in demand for bitcoin (BTC) in the United States. This surge in interest has led to a rise in the Coinbase Premium, reaching its highest level since July at 0.11%. The spike in this metric indicates a higher demand for BTC from U.S. investors compared to exchanges outside the country. This movement of bitcoin from non-U.S. trading platforms to Coinbase is typically observed during bullish market cycles, signaling an upward trend in bitcoin’s price.
The Inter-exchange Flow Pulse (IFP) metric, which measures the one-year cumulative sum of BTC net flows between Coinbase and other exchanges, has also experienced an increase. This movement suggests that bitcoin is flowing into the U.S.-based crypto platform due to the price premium and heightened demand in the U.S. Additionally, bitcoin demand in the perpetual futures market rose in tandem with Open Interest (OI) surging by approximately 10,000 BTC to 276,000 BTC. This spike indicates that traders are opening new long positions, with buy orders outweighing sell orders.
As a result of the increased demand for Bitcoin in the U.S., the price of the cryptocurrency experienced a 6% uptick, climbing from $60,000 to $65,000, reaching its highest level since August 2. Despite this rally, investors have not engaged in significant profit-taking, with realized profits only amounting to $536 million. This is significantly lower compared to the multi-billion dollar profit figures recorded at local market peaks earlier this year. Moreover, the Apparent Bitcoin Demand 30-day growth has decreased from 496,000 BTC in early April to a negative state of 36,000 BTC. Apparent Demand is determined by the difference between the daily total bitcoin block subsidy and the daily change in the number of BTC that have not been moved in a year or more. CryptoQuant emphasizes that the crypto market requires an increased apparent bitcoin demand to fully recover and achieve new price highs.
Overall, the rise in bitcoin demand in the U.S. has been notable, driving positive price movements and signaling a shift in investor sentiment towards the leading cryptocurrency. However, it is essential for the market to sustain this demand growth and address the challenges posed by declining Apparent Demand to ensure a stable and prosperous future for bitcoin and the broader crypto market.
