Bitcoin Approaches $66,000 but Bull Market Signals Remain Hidden
The sudden rise in Bitcoin (BTC)'s price has shocked both investors and analysts alike as the leading cryptocurrency closed at its two-month peak on September 28, now hovering close to the $65,500 mark. The same rise coincides with an increase in the S&P 500 index that reached its all-time high on September 26.
The strong economic indicators and the bundle of measures taken to boost the markets and investors' confidence in China have driven the upward surge in the stock market. Despite all these positive signs, a number of metrics indicate that Bitcoin is nowhere near entering what can be called a 'bull market'.
The recent rally of Bitcoin is clouded by investor skepticism since some investors have grown cautious against the possible rejection around the $70,000 level. Some even fear that a looming recession may have adverse impacts on any risk-on markets, including cryptocurrencies.
To investors, Bitcoin remains scarce and sovereign, but the drivers are considerably different from the traditional stock market. Historically, when investors think a recession is in store, their havens of choice have been gold, short-term government bonds, and companies that are dominant in their fields.
Recent data from the Coinbase exchange mobile application shows that despite Bitcoin gaining 21% in price over three weeks, retail investor appetite for digital assets remains less than impressive. The application ranked 385th on September 28 from 482nd on September 14 but still showed that retail interest has room to grow.
It is indeed institutional investors who have been pushing the recent price upsurge in Bitcoin, as seen from a surge in inflows to spot exchange-traded funds. However, data from Chinese markets tells a different story. To gauge the appetite of its investors, it is important to look at the demand for stablecoins in China. The premium on USD Tether (USDT) in China has been under parity for two weeks already, indicating bearish sentiment.
