Behind the Surge in Bitcoin Prices: The Power of the Spot Market
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In the past month, the price of Bitcoin (BTC) reached a new high of $108,268, attracting widespread attention in the market. Analysis shows that the demand in the spot market is the main driving force behind this price increase.
The Rise of the Spot Market
On-chain data indicates that Bitcoin's bull market cycle is either led by the futures market or driven by the spot market. The bull market in 2023 was primarily driven by active trading in the futures market, while the spot market gained momentum thereafter. However, from March to September 2024, trading volumes in both markets declined until demand rebounded in October, making the spot market the main driving force.
The growth in spot demand also indicates a reduction in speculative behavior, with investors more inclined to hold long-term. This buying pressure has continuously pushed prices higher and encouraged more funds to flow into the spot market.
Recent Market Adjustments and Long-Term Potential
Although Bitcoin prices have seen a correction after reaching new highs, currently trading at about $103,825 (a decrease of 2.46%), the inflow of funds into the spot market remains strong. Users are withdrawing significant amounts of Bitcoin from exchanges to private wallets, which not only reduces the circulating supply in the market but also enhances confidence in long-term holding.
At the same time, Bitcoin's **Stock-to-Flow Ratio (SFR)** has risen from 37k to 46.5k, indicating that the scarcity effect of reduced supply and increased demand is strengthening. With the combination of buying pressure and scarcity, Bitcoin prices are expected to continue rising.
The Spot Market Determines Future Trends
Despite potential fluctuations in the short term, the growth in spot market demand has become an important support for Bitcoin prices. The reduction in exchange liquidity and the enhancement of scarcity indicate that bullish sentiment remains strong in the long term. For investors, short-term adjustments may present a good opportunity to increase their holdings.
The future trend of Bitcoin is being redefined by the spot market, and this shift may further solidify the foundation for its price increase.
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