Bitcoin (BTC) has recovered from a local low of $90,742 on November 26, and has now surpassed $95,000. This recovery has also spread throughout the cryptocurrency market, with the total market value increasing by 7.3% from November 26 to 28, reaching $3.32 trillion.
Investors are now looking for signs to determine whether Bitcoin has found support around the $90,000 level before continuing its march toward $100,000.
Coinbase Premium Index: BTC demand returns
The recent decline of Bitcoin, from a record high of $99,655 on November 22 to a weekly low of $90,742 on November 26, can be attributed to a decrease in demand from the US. This is clearly reflected in the significant decline in the Coinbase Premium index during the same period.
The Coinbase Premium Index measures the price difference between the BTC/USD pair on the largest US exchange, Coinbase, and the equivalent BTC/USDT pair on Binance.
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The chart below shows that this index has rebounded, rising from -0.0387 on June 26 to the current value of 0.091.
Bitcoin's Coinbase Premium Index. Source: CryptoQuant
The increase in the Coinbase premium index is a sign that demand from US retail investors is rising.
“Demand for Bitcoin is picking up again after the recent price correction,” Julio Moreno, head of research at on-chain analytics platform CryptoQuant, said in a post on November 27 on X.
Moreno shared a chart showing that the clear demand for Bitcoin continues to rise in the expansion zone, indicating that new investors are entering the market.
“The expansion of demand is a factor that helps Bitcoin rise higher.”
Clear demand for Bitcoin; 30-day aggregate. Source: CryptoQuant
Inflow into Spot Bitcoin ETFs turns positive
The recovery of BTC is coinciding with new inflows into US spot Bitcoin ETFs as they turned positive on November 26.
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US spot Bitcoin ETFs recorded a net daily inflow of $103 million on November 26, ending a two-day streak of net outflows totaling $558 million.
Notably, Bitwise's Bitcoin ETF (BITB) recorded the largest inflow, $48 million in a single day, while BlackRock's IBIT fund did not record any inflow for the first time since November 15.
Bitcoin ETF inflow table. Source: Farside Investors
US spot Bitcoin ETFs have attracted approximately $30.3 billion in total inflows to date.
Additional data shows that institutional investors have increased their exposure to digital assets. Investment products in Bitcoin have attracted inflows of $3.07 billion, accounting for over 98% of total inflows in the week ending November 22.
Capital inflows by asset. Source: CoinShares
This indicates that investment demand for Bitcoin products from institutions is being restored, often a positive catalyst for BTC price in the future.
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Bitcoin balances on exchanges have fallen to the lowest level in 6 years
BTC balances on exchanges continue to decline even as Bitcoin approaches the $100,000 mark, with all investors in profit, data from CryptoQuant shows.
The amount of Bitcoin on exchanges has continued to decrease in November, below 2.4 million BTC, the lowest level since November 2018.
BTC reserves on exchanges. Source: CryptoQuant
The decrease in BTC balances on exchanges indicates less supply available for potential selling as investors move their funds elsewhere, such as to self-custody wallets.
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