Article source: Official account Pepe Stud
On Tuesday (November 12), Bitcoin successfully climbed to $89,465, a record high. Eric Balchunas, senior ETF analyst at Bloomberg, said that the asset size of a US Bitcoin spot ETF has reached 2/3 of that of a gold ETF, which means it will soon be formed between the two”Golden fork”.Technical analysisThe teacher emphasized that despite Bitcoin's record high,Technical sideThere doesn't seem to be any overheating.
Eric wrote, “The asset size of the US Bitcoin Spot ETF has now reached 84 billion US dollars, which is equivalent to 2/3 of the asset size of a gold ETF. All of a sudden, they're likely to surpass gold on their first anniversary.”
He said he had expected this to take 3-4 years.
According to statistics from the US Decision Desk Headquarters (DDHQ), the 2024 presidential election results, after Trump won the presidential election, the Republican Party also controlled the House of Representatives and Senate.
This once again set off the “Trump Trade” (Trump Trade), where the US dollar index and Bitcoin became the biggest winners, while gold continued to fluctuate at a low level.
Currently, the signal that investors are desperate to grasp is: Can the currency price soar to a new high of 89,465 US dollars and still be traded?
CryptoQuant analyst Aytekin shared a comprehensive analysis of tools to assess the temperature of the Bitcoin market, focusing on distinguishing useful metrics from potentially misleading ones.
He said that investors' concerns usually focus on whether Bitcoin can hit a new high and when it might reach the peak of the market. To answer these questions, he highlighted two charts that measure market sentiment that he didn't pay much attention to: open contracts and profitable supply metrics.
The analyst further noted that establishing a causal relationship between price and open contracts remains challenging, as historical data shows that price fluctuations tend to drive changes in the level of open contracts rather than the other way around.
Furthermore, analysts revealed that with the growth of the futures market and the adoption of Bitcoin, the level of open contracts is expected to be higher in the next few years.
Another potentially misleading indicator, Aytekin believes, is “profit supply,” which measures the profitability of the entire network. This indicator correlates to Bitcoin's nominal price and usually causes profitability to spike significantly above 95% during historical peak (ATH) periods.
However, he pointed out that if extreme profitability continues to trigger large-scale sell-offs, reaching new highs will be a problem. Instead, he suggests considering how long these high profit levels will last, and notes that historically, this can last up to a year in the broader market cycle.
In contrast, the analyst highlighted two metrics he believes are valuable for tracking Bitcoin market sentiment: the financing rate and return on used output (SOPR). The financing rate tracks the costs paid between long and short positions in the futures market, and is a tool to identify “excessive” market optimism.
Aytekin said that monitoring this indicator provides better insight to assess market conditions than open contracts. Up to now, he pointed out that financing interest rates have not predicted extreme market behavior.
He revealed that the SOPR indicator can identify profit trends, especially when using the 30-day moving average for smoothing.
Aytekin emphasized that unless profitability coincides with changes in supply within the market, profitability itself is not a risk. He revealed that the current SOPR level indicates that although the market is showing signs of profit, there are no symptoms of overheating.
