- Bitcoin cooled after its last rally, but demand for futures rose to levels last seen more than a year ago
- The market is now embracing caution amid increasing uncertainty about major events
Bitcoin’s latest rally raised hopes that the price of crypto might soar to new highs. However, despite a brief surge to $73,000, the crypto has since fallen below $70,000. While this suggests profit taking is taking place, recent observations suggest uncertainty may exist in November.
Will the Bitcoin bulls regain control or is this the start of a major pullback? Well, according to a recent one CryptoQuant AnalysisBitcoin has registered robust buying pressure from Bitcoin Futures whales.
According to the same, the last time futures demand was this high was in September 2023. After this event, Bitcoin started a solid bullish run until April. Will things go the same this time?
Bitcoin Futures’ rise may be in line with bullish expectations or sentiment among Futures investors. However, BTC demand has slowed significantly in recent days. For example, there seemed to be an influx Bitcoin Spot ETF Inflows during the past 7 days.
However, the last day of October was marked by the lowest inflow during the week.
Bitcoin traders are embracing a cautious approach
The sudden drop in institutional buyers (ETFs) marked a sudden shift to the side of caution. This reflected the recent price shift and demand dynamics.
Bitcoin exchange flows peaked at 67,373 BTC on October 31, significantly higher than outflows which peaked at 62,024 BTC on the same day.
Source: CryptoQuant
Bitcoin exchange flows have since fallen to their lower levels, with inflows still significantly higher than outflows. This confirmed that selling pressure has since exceeded demand, hence the price drop.
The market also showed a decrease in demand for leverage over the past two days. This suggested that investors were uncertain about the size of the latest retracement. This is because many expect higher prices in the coming weeks due to the latest wave of bullish optimism.
Source: CryptoQuant
Bitcoin Open Interest also fell significantly, confirming that derivatives traders are also being cautious. Both the estimated leverage ratio and open interest metrics previously rose to their highest levels in 2024 in late October.
One reason people are cautious is because they expect the US elections to bring some volatility. This also means that Bitcoin could resume normal supply and demand activity after the elections are over.
The outcome can also influence the level of demand. This, combined with the rise in futures prices, can lead to extremely volatile moves.