Crypto analyst Michaël van de Poppe recently shared his belief with his 669,200 followers on social media that the crypto bear market might finally be over.
He congratulated those who had weathered the bear market and noted that the crypto markets were displaying signs of the beginning of a bull market cycle.
This news raises the question: Are we truly out of the bear market?
What's next for Bitcoin and altcoins?
One indicator of a potential shift in the cryptocurrency market is the increasing institutional demand for Bitcoin. Miles Deutscher, a known crypto analyst, highlighted the growing institutional interest in Bitcoin. He pointed out that the CME Futures volume recently reached a two-year high, indicating a huge institutional footprint in the market.
The CME Group confirmed this trend, reporting that open interest in CME Group Bitcoin futures had reached an all-time high of over 20,000 contracts, equivalent to $3.4 billion in notional value.
Additionally, the CME Options volume saw a three-month peak, and the call options open interest surpassed $10 billion, surpassing the 2021 bull run peak of $9.9 billion. These metrics collectively underscore the current extent of institutional engagement in the crypto market.
Furthermore, crypto-related stocks have witnessed a 15% increase over a week, indicating a positive response from the broader financial ecosystem to the cryptocurrency market upswing.
This surge in institutional interest is further reflected in the massive inflow of $43 million into Bitcoin in a single day, equivalent to 10% of the total year's inflows up to that point.
Shift in Investor Dynamics
The changing dynamics of investors in the crypto market are becoming evident. More traditional investors are entering the crypto space, while offshore crypto exchanges are losing favor in place of regulated counterparts.
Binance's market share in the BTC futures market has dropped to a year-to-date low of 30%. This shift suggests that institutional players are becoming increasingly dominant in the crypto market.
Stablecoin inflows have also experienced a resurgence, with analyst Pentoshi noting that stablecoins bottomed out three months ago, and for the first time in two years, inflows are being observed. This may be seen as a positive sign of institutional demand for Bitcoin.
JP Morgan's Perspective
Adding another layer to the institutional discussion is the anticipation surrounding the potential approval of a spot Bitcoin exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC).
JPMorgan noted that institutional participation seems to be a driving force behind the latest flow impulse in the market. They further emphasized that their futures position proxy based on CME Bitcoin futures, primarily used by institutional investors, has spiked in the past week.
JPMorgan's analysis also revealed a notable shift in large BTC inflows into sizable wallets, indicating institutional investor demand. This stands in contrast to earlier patterns where smaller, retail-centric wallets were predominant.
Bitcoin's Price Movement
Returning to the topic of Bitcoin's price, Van de Poppe suggests that while Bitcoin is currently fighting to overcome the $34,700 resistance, a breakout above this level could lead to a price range of $37,000 to $38,000.
On the other hand, areas between $32,600 and $33,100 may present opportunities for long positions. However, Van de Poppe also cautions that corrections in upward trends are usually swift.
Van de Poppe's analysis indicates that Bitcoin could potentially reach $37,000, but he suggests that a period of sideways consolidation would be beneficial for the altcoin markets. At the time of writing, Bitcoin is valued at $33,874.
The cryptocurrency market is showing promising signs of emerging from the bear market, with increasing institutional interest in Bitcoin. The potential approval of a Bitcoin ETF by the SEC and the changing dynamics of investors further contribute to the positive sentiment in the market.
However, the need for caution and the possibility of swift corrections should not be overlooked as the market continues to evolve. As we navigate these developments, it's essential to stay informed and monitor how cryptocurrencies are evolving.