As a seasoned researcher with years of experience in the dynamic world of cryptocurrencies, I find myself intrigued by the recent developments in the Bitcoin market. The surge in demand from U.S. investors, as evidenced by the Coinbase Premium and Inter-exchange Flow Pulse, is indeed a compelling sign of a bullish trend. However, the overall demand growth remaining negative, despite the rally, presents an interesting paradox.


In light of remarks made by Federal Reserve Chair Jerome Powell during last week’s Jackson Hole symposium, there’s been a growing interest in Bitcoin (BTC) within the United States. Yet, this surge in demand hasn’t translated across the broader cryptocurrency market.

As per a recent analysis by CryptoQuant, Bitcoin’s price surge can be attributed to increased American investor enthusiasm. However, it’s important to note that the expansion of total Bitcoin demand has been minimal and has even shown a decline in the past couple of weeks.

Bitcoin Rallies Amid Increased Demand

It’s clear that American investors are showing a growing interest in Bitcoin, as seen by the significant jump in the Coinbase Premium, reaching 0.11% – its highest point since July. This increase suggests that domestic trading platforms like Coinbase are experiencing a higher demand for Bitcoin from U.S. investors compared to foreign exchanges.

As an analyst, I’ve noticed a significant shift in the flow of Bitcoin (BTC) from non-U.S. trading platforms towards Coinbase. Historically, such movements have been observed during bull markets, signifying a potential increase in the price of Bitcoin.

The Inter-exchange Flow Pulse (IFP) metric, which calculates the total net Bitcoin transfers from other exchanges to Coinbase over a year, increased as well. This suggests that more of the cryptocurrency was moving towards the U.S.-based platform due to a price advantage and increased demand in the United States.

Furthermore, the desire for bitcoin grew in the continuous futures market, coinciding with an increase in Open Interest. Open Interest surged approximately 10,000 BTC to reach 276,000 BTC, suggesting that traders were initiating new long positions. Buy orders were more prevalent than sell orders during this period.

Apparent Demand Still Negative

As American interest in Bitcoin surges, its value climbed by 6%, reaching an all-time high since August 2 at $65,000. However, investors were reluctant to cash out during this surge, as the total realized profits only reached $536 million – a fraction of the billions made at previous market peaks this year.

As an analyst, I’ve observed a shift in Bitcoin demand over the past month. Initially, there was a significant increase of approximately 496,000 BTC in early April. However, this growth has since reversed, and we now find ourselves in a negative state, with a decline of around 36,000 BTC. This apparent demand is calculated by subtracting the daily total Bitcoin block subsidy from the daily change in the number of Bitcoins that have not been moved in over a year.

As an analyst, I believe that for the cryptocurrency market to fully recuperate and reach new price peaks, there should be a noticeable surge in the perceived demand for Bitcoin.

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2024-08-31 14:20