- Bitcoin exchange inflows dropped.
- Chinese liquidity could push BTC to $77,000.
Bitcoin [BTC] continues to capture the attention of investors, including traditional financial institutions, who are increasingly viewing Bitcoin as a long-term store of value.
Unlike previous cycles where Bitcoin was often traded for short-term gains, much of it is now stored in cold wallets, indicating strong investor confidence.
At the start of the fourth quarter, Bitcoin exchange inflows reached the lowest level of the year, indicating that investors and institutions are anticipating long-term gains for BTC as its market capitalization continues to grow with widespread adoption.
Source: CryptoQuant
The Chinese liquidity boost
Chinese stocks are outperforming global markets, largely thanks to a government stimulus package that has injected significant liquidity.
This increase in liquidity has implications for risky assets like BTC, which has historically been highly correlated with the performance of Chinese stocks.
Following the biggest stimulus from the People’s Bank of China since the pandemic hit in late September, Chinese internet stocks rose by $2 trillion.
Many traders view this rise in Chinese stocks as a potential signal for a similar upward move in Bitcoin. This reinforces why BTC has seen reduced foreign exchange inflows paving the way for higher prices.
Source: Bloomberg
In addition to the liquidity boost, the biggest gap between cryptocurrency open interest and cash Bitcoin futures was last week.
More traders are now using cash to back their leveraged positions, rather than Bitcoin itself. This shift is positive as cash margins reduce volatility and the risk of forced liquidations, creating a more stable trading environment.
Source: Glassnode
Meanwhile, retail traders continue to chase profits with high leverage, adding to market volatility.
This difference between institutional caution and retail enthusiasm highlights a maturing Bitcoin market. Now, long-term sustainable growth is increasingly driven by institutional activities.
Can BTC Reach $77K?
The Volatility Adjusted Power Law Index estimates the fair price of BTC at $77K, taking into account long-term growth and volatility. Despite price consolidation around $60,000, the fair price has risen from $70,000 to $77,000 in the past month.
Read Bitcoin’s [BTC] Price forecast 2024–2025
Increasing liquidity due to Chinese stimulus measures and reduced volatility in the futures markets indicate that Bitcoin is gaining momentum for a breakout. Bitcoin looks poised to break higher, with potential to reach $77K as the fourth quarter progresses.
Source: Sina/X
With global liquidity rising, it seems more realistic for BTC to reach $77,000. This is especially true when economic conditions and institutional support stimulate growth.