Bitcoin (BTC) experienced a significant rise on Wednesday, gaining 7.5% over the previous 24 hours to trade above the $93,000 mark. Analysts are anticipating further new highs for the cryptocurrency.
This upward trend coincides with record capital inflows, a growing realized cap, and decreasing volatility, all of which indicate a transformation in market structure. These findings are detailed in a new joint report from Glassnode and Fasanara Digital.
Key takeaways from the report highlight that Bitcoin has attracted a record $732 billion in new capital since the 2022 cycle low. Breaking the resistance level at $93,000 is identified as a crucial factor for sustaining the current recovery.
Bitcoin Attracts $732 Billion in New Capital
Bitcoin's recent price action saw it experience a drawdown of as much as 36% from its all-time high of $126,000, which was reached on October 6. This decline had previously sparked fears of a potential crypto winter.
However, the research conducted by Glassnode and Fasanara Digital reveals that Bitcoin has attracted over $732 billion in net new capital since the cycle low of 2022. The report states, "The 2022–2025 cycle alone has attracted more capital than all previous cycles combined." This influx has pushed the realized cap to approximately $1.1 trillion, with the spot price increasing by over 690% from $16,000 to $126,000 at its peak.
The report attributes this growth to the "profound impact of institutional adoption and the emergence of regulated investment vehicles, such as spot ETFs." It further elaborates:
"The magnitude of capital inflows throughout the current cycle underscores a structural transformation in Bitcoin’s market depth and investor base."
Bitcoin's realized cap, which measures the total capital invested in all BTC across the network, is typically one of the first metrics to contract during bear markets. The provided chart suggests this is not currently the case.
Concurrently, Bitcoin's long-term volatility has significantly decreased, falling to 43% from a high of 84.4% during the peak of the 2021 bull run. This indicates a sustained dampening of systemic volatility.
The report attributes this decline to "Bitcoin’s growing market depth and institutional participation" driven by ETFs and treasury companies. It further notes:
"This compression in volatility highlights Bitcoin’s transition toward a more institutionally anchored asset."
Traditionally, bear markets commence with rising volatility and diminishing liquidity, which contrasts with the current trend of long-term structural decline in volatility.
The report also highlights that demand for spot Bitcoin ETFs has been "exceptional" since their launch in January 2024. These investment products now hold approximately 1.36 million BTC, representing around $168 billion in assets under management, which accounts for roughly 6.9% of the circulating supply.
"This underscores the growing integration of Bitcoin within institutional portfolios and highlights the pivotal role ETFs now play in shaping market structure."
Bitcoin Price Must Break $93,000
Data from Cointelegraph Markets Pro and TradingView indicates that BTC was trading below a zone of significant ask liquidity.
Glassnode stated in an X post on Wednesday, "BTC faced a strong rejection at $93K last week, but as price attempts to break through this level again today, we’re seeing large short-liquidation clusters forming." They added:
"Short liquidations can act as fuel for upside, as forced buyers amplify momentum."
Analyst Daan Crypto Trades observed the "local horizontal resistance" above $93,000, suggesting that flipping this area into a new support zone is critical for propelling the BTC/USD pair towards $98,000.
The analyst also noted, "The BTC price has made a 'higher high and a higher low, so technically, the market structure is back to bullish on this time frame." They further commented:
"$97K-$98K is still an interesting spot in terms of liquidity. That would be in play if this current area breaks."
As previously reported, many analysts remain optimistic about Bitcoin's recovery. The Bollinger Bandwidth indicator, in particular, offers hope for a BTC price surge similar to the one observed in 2023 towards the year-end.