After Trump’s victory, Bitcoin continued to surge, reaching new all-time highs. However, many people worry that an overheated market could lead to a price correction. Nevertheless, several analysts indicate that there are no signs of overheating in Bitcoin at present.
(Previous context:
Trump’s first term saw Bitcoin skyrocket by 1900%! Can BTC reach $1 million this time?
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(Background supplement:
JPMorgan: Trump’s inauguration will fuel an “8-week rally” for Bitcoin, with dual benefits from BTC-friendly promises and tariff policies.
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Table of Contents
Analysts: No signs of market overheating
Bitcoin funding rates remain “virtually unchanged”
Bitcoin spot ETF inflows hit a record high
The U.S. presidential election concluded with Republican candidate Trump winning the 47th U.S. presidency by a margin of 295 to 226 electoral votes. Due to his multiple public endorsements of Bitcoin before the election, BTC experienced a celebratory rally, with its price surging from $69,000 on the 6th to $75,000, and breaking through $76,000 early this morning, continuously reaching new all-time highs.
As Bitcoin continues to hit new highs, many investors believe the market sentiment is overly FOMO, and the crypto market may face a correction. However, according to a report by Cointelegraph, several analysts state that there are no signs of market overheating at present.
Alex Thorn, head of research at Galaxy, pointed out in a market report released yesterday:
On the same day, Aurelie Barthere, an analyst at the crypto analytics company Nansen, expressed a similar view:
Additionally, Thorn noted that although the growth in Bitcoin’s Open Interest (OI) sometimes raises concerns about volatility, the current funding rates indicate that traders are optimistic about Bitcoin’s prospects, with buyers willing to pay fees to hold long positions.
Data from Coinglass shows that Bitcoin’s Open Interest has reached an all-time high, but the funding rates across exchanges remain positive, suggesting that the contract market continues to be bullish on Bitcoin. (However, the author believes that most people going long may not necessarily be a bullish signal, as it also means that when the main forces dump, it could be more impactful.)
Positive funding rates:
Longs (bullish) pay funding fees to shorts (bearish), indicating optimistic market sentiment.
Negative funding rates:
Shorts pay funding fees to longs, indicating pessimistic market sentiment.
Bitcoin funding rates across exchanges
Bitcoin Open Interest
On the other hand, data from Sosovalue shows that Bitcoin spot ETF recorded its highest single-day net inflow since its listing yesterday (7th), with a total net inflow of $1.38 billion, surpassing the $1 billion net inflow level for the first time since March 12.
Bitcoin spot ETF net inflows and outflows
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JPMorgan: Trump’s inauguration will fuel an “8-week rally” for Bitcoin, with dual benefits from BTC-friendly promises and tariff policies