Bitcoin Breaks $90K Again as On-Chain Metrics Show Surge in Market Confidence

Bitcoin has taken back the $90,000 level, showing renewed bullish momentum and driving investor sentiment back into euphoric territory.

The price business, which unfolded rapidly over the past two days, has had pronounced knock-on effects across both spot and derivatives markets. On-chain and exchange data now suggest that the world’s largest cryptocurrency is making ready for its next big move—next stop, the $95,000 to $98,000 resistance zone.

Currently, 91% of all Bitcoin addresses are in profit, shining a light on the strength of the rally and the psychological importance of this milestone. It is, of course, the exact opposite of the scenario we saw in previous months, when volatility and macroeconomic worries had BTC stuck well below its previous peak.

The sharp recovery of Bitcoin has not been merely a story of rising prices. It has been driven by significant new inflows and by a broad, across-the-board recovery in trading activity.

In the derivatives market, Bitcoin futures surged from $36.2 billion to $38.6 billion in under 36 hours. This $2.4 billion bump marks the highest level of open interest since late March—not just for the size of the increase, but also for its speed. It reflects a almost maniacal accumulation of leveraged positions, as traders rush in to try to capitalize on the breakout.

Open interest that increases can be a double-edged sword: it reveals market engagement but also boosts the chances of short-term volatility when traders enter and exit positions. In any case, the current level of open interest seems to indicate institutional and professional traders engaging with the market in a confident manner, deploying capital in anticipation of a potentially larger upward move.

In tandem with the derivatives explosion, we are witnessing a huge increase in spot volume. In the same 36-hour window, Bitcoin’s spot trading volume increased nearly threefold from $2.9 billion to $8.0 billion. This concomitant rise in spot and futures activity is a robust signal that new capital is coming into the market and not simply reallocating within preexisting positions.

This time the spot market is showing robust demand. Last time, we saw how mini-rallies were largely fueled by derivatives alone, but this time around, things are quite different. Derivatives still play a main role in driving market moves, but we’re seeing much more demand in the spot market than before.

So, who are the spot buyers? Well, they’re typically less speculative than leveraged traders, which is part of why we view the spot market as a somewhat more stable source of long-term demand.

Bitcoin spot ETFs enjoyed a steady inflow of new capital even as Bitcoin’s price ranged from just over $30,000 to just under $32,000. The twelve Bitcoin ETFs listed in the U.S. recorded total net inflows of approximately $381 million for the day—and none of the ETFs recorded a net outflow on April 21. Also, it’s worth noting that for the day of April 21, the total net inflows of $381 million into the U.S.-listed Bitcoin ETFs were much larger than the flows associated with just about any other macro financial portfolio.

The inflow into this ETF is an essential piece of this puzzle. One of the principal stories in this cycle has been the demand from institutions, and regular inflows into well-regulated investment vehicles like this ETF are a pretty clear sign that more and more wealth managers and institutions are coming around to seeing Bitcoin as a mighty respectable asset class. Wealth management firms and other institutions tend to be interpreters of the long-term story. They’re not day traders as a rule.

It also shows that demand for exposure to Bitcoin via conventional financial avenues remains undeterred by the kinds of big-picture problems that might ordinarily give institutional investors pause—like uncertainties over monetary policy or concerns about inflation. In fact, it seems that the very opposite is true: with ever-improving regulatory clarity around digital-asset investment vehicles, would-be institutional investors are appearing ever more confident in the Bitcoin complex.

While the reclaiming of $90,000 by Bitcoin is a well-formed indicator, the real test still lies ahead. On-chain analysis from IntoTheBlock identifies the immediate next major resistance zone as lying structurally between $95,600 and $98,290. This range marks an area of very dense previous activity, where numerous traders have historically entered and exited profitable positions. To get through this zone, we would likely need to see continued inflows, a pretty consistent volume at spot across exchanges, and a derivatives market that is at least stable, if not growing.

If Bitcoin can push past the $98,000 point, it will start to test the psychological barrier of $100,000—a level that has long been anticipated but never reached. Whether or not this occurs in the next few weeks will depend on how much momentum this breakout can sustain.

Currently, the signals look good. Spot and derivative trading has both picked up significantly; ETFs have not only seen inflows ramp up but have also experienced a respite from the heavy liquidation events that had dogged the vehicle earlier this year; and, according to various profit metric estimates, Bitcoin holders are, by and large, sitting pretty.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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