November has been a great month for Bitcoin (BTC) so far, and many analysts believe that the future is still bright for the leading cryptocurrency.
It is currently priced at $ 16,000, with its price up 23% since the start of the month, and has mostly risen after the end of the US presidential election. Now, Bitcoin's spot volume has surpassed all previous records in 2020, showing the growing demand for Bitcoin.
The strong rally to $ 16,200 sent spot Bitcoin trading volumes up more than 270% in the past month. And according to a recent report by Staff Research, the daily volume on November 5 was the highest since the Black Thursday crash that sent Bitcoin's price down below $ 4,000 on March 13.
The true daily volume of Bitcoin. Source: Arkan Research
Market trends have also reached records, and this is clearly reflected in the fear and greed index for cryptocurrencies, which currently stands at 86, which is a reflection of the extreme greed in the market.
Fear and Greed Index (daily). Source: digital asset data
Many seasoned investors are trading in the opposite direction of the signal coming from the index, as "extreme greed" is a reflection of a fear of missing out (FOMO) - or a feeling of euphoria in the market and a signal of profit taking.
Institutional size continues to rise
Not only did the spot volume of Bitcoin hit its highest level in 2020, but institutional interest also spread throughout November, with many high-profile companies and high net worth individuals investing in Bitcoin.
Also, open interest on Bitcoin futures on the Chicago Mercantile Exchange rose to an all-time high last week at $ 934 million. The number has been growing since the beginning of October and has increased by 169% over the past month.
Open interest on Bitcoin futures contracts on the Chicago Mercantile Exchange. Source: Arkan Research
According to Arkan Research, the growth in the number of participants may be the main cause of the sharp increase in open interest. Reports from the CFTC indicate that there are now 102 large traders holding trades (the minimum volume is 25 Bitcoin), which is a 126% increase over the average numbers seen throughout 2019.
Will the Bitcoin price rise as more participants enter the market?
Increased participation in both spot trading and regulated Bitcoin products clearly affects the current bullish trend of Bitcoin and may change the way individual, institutional and traditional investors view digital assets.
As volumes continue to increase in first-tier exchanges and regulated derivative markets, it is possible that the Bitcoin ETF will finally be approved, and this would really open doors for institutional investors to deal with Bitcoin and other cryptocurrency assets.
0 Comments