Institutions Guzzling Bitcoin: Is $100k Next?

by

The latest fluttering of Bitcoin, that curious creature of finance, seems to be propelled by a brisk acceleration of institutional appetite. Charles Edwards, founder of Capriole Investments, assures us that the great purchasers are now consuming roughly six times the daily minting of BTC, a fact that could make even a cautious accountant swoon and then pen a sonnet about liquidity. Capriole’s long-resigned models have roused themselves from their slumbers and swagger back into bullish company, as if a tin drum could summon the ghosts of bullish brokerage days past.

In a May 5 Substack dispatch with all the futile bravura of a sermonizing luncheon speaker, titled “Institutions are Guzzling Bitcoin,” Edwards notes that institutional flows have intensified since his previous bulletin, rising to around 577% of daily mined supply. Bitcoin, he adds with the calm of a man tallying chess pieces, has gained 12% over the same interval.

“Institutions are slurping up 600%+ of Bitcoin’s daily mined supply. Every time it’s been this high before, price has shot up over the next week. As the chart shows, we’ve typically seen double-digit returns from here with a couple of weeks in all prior cases.”

Based on that gallant parade of precedent, Edwards contends that a comparable move would carry Bitcoin to a near $96,000. The argument, as plain as a parish notice: if institutional demand continues to outstrip new issuance by such a margin, available supply tightens with the speed of a railway timetable, especially in a market where long-term holders have grown suspicious of selling into weakness.

Capriole Models Turn Bullish Bitcoin From $71,000

Edwards points to Capriole’s internal mechanisms, including Trend King and Macro Index, both of which flipped long around $71,000. Trend King, described by Edwards as the firm’s longest-running live trading strategy, is currently leveraged long Bitcoin. The model is primarily technical, though it also weighs selected on-chain inputs, as if philosophy and arithmetic were sharing a bar at dusk.

Macro Index, Capriole’s fundamentals-only Bitcoin model, has also moved into what Edwards calls “recovery” mode. The model tracks more than 200 on-chain and macro market data points, offering an aggregate view of Bitcoin’s fundamental backdrop. Edwards says its trends “tend to be sticky,” implying that the signal is less about a short-term tactical flourish and more about a broad regime shift, like a change in weather that won’t be reversed by one gust of wind.

Derivatives data adds another layer to the bullish case. Capriole’s Bitcoin Perps Heat indicator, which monitors relative extremes in perpetual swap markets by measuring funding rates and open interest across a four-year normalization window, recently displayed what Edwards called an “extremely bullish long term signal” following excessive shorting.

That matters because market positioning appears to have reset before the breakout. Edwards wrote that “complete capitulation on derivatives markets occurred in March/April,” suggesting that leverage had been flushed out prior to Bitcoin’s latest ascent. In that framing, the rally is not merely chasing overheated longs; it is emerging after traders were leaning too defensively, like guests who have finally risen from the sofa after a stormy luncheon.

SOPR Breakout Confirms On-Chain Momentum

Spent Output Profit Ratio, or SOPR, is another key piece of the thesis. Edwards highlighted that SOPR had spent significant time below 1, a zone he described in the previous issue as historically offering “great Bitcoin opportunities.” In the latest note, he says the metric has now closed back above 1, signaling a return of positive price and on-chain momentum.

“Bitcoin looks incredibly strong here. It’s also supported by relative strength against all markets, having bottomed and outperformed since the Iran war started. We see consistent strength across technical and fundamental data for Bitcoin today.”

The equities backdrop is more mixed, but still broadly supportive of risk assets in Edwards’ view. He says Capriole’s “quiet strong market” strategy remains risk-on, while collapsing credit spreads and a favorable VIX regime back the current breakout. The S&P 500 has also printed a fresh all-time high, with Edwards identifying 7,000 as the key weekly level to watch.

There are caveats. Edwards flags weakness in the advance-decline line, high oil prices linked to the Iran conflict, and the gold-to-stock ratio as longer-term equity risks. But for now, he frames those as warnings rather than confirmed bearish turns.

At press time, Bitcoin traded at $81,429.

Read More

2026-05-06 05:28