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Fundamental Analysis

Institutional Investors Show Renewed Interest in Bitcoin

Institutional Investors Show Renewed Interest in Bitcoin

Bitcoin maintains its position above the $70,000 mark despite a relatively quiet holiday period in the cryptocurrency market.

However, there are signs of renewed interest from institutional investors, as indicated by the Coinbase premium gap.

The resurgence in institutional buying became apparent towards the end of March 29, coinciding with the release of the US PCE inflation data. This was reflected in the Coinbase premium gap, which exceeded 50 since March 30, suggesting a possible return of US institutions to Bitcoin investments.

The Coinbase premium gap, a comparison between Coinbase Pro’s USD pair price and Binance’s USDT pair price, is closely watched as an indicator of institutional activity in the market.

Analysts have noted a divergence between hedge funds and asset managers, with the former increasingly engaging in short-selling while the latter continue to purchase Bitcoin futures. This dynamic hints at a potential short squeeze in the midst of the current bullish sentiment, which could drive Bitcoin’s price higher.

READ MORE: Institutional Investments in Bitcoin Expected to Surpass $1 Trillion

Michael van de Poppe, a well-known analyst, observes that despite Bitcoin’s recent sideways movement around $70,000, the cryptocurrency remains on track with its long-term cycle. He predicts that in five years’ time, a price of $70,000 per Bitcoin may be considered inexpensive.

However, trading activity in futures and options markets has been subdued due to the holiday period, with traders adopting a cautious approach while awaiting further developments in Bitcoin’s price. CME BTC futures open interest has seen a slight decline to $11.64 billion, while total BTC options open interest has dropped from $32.31 billion to $21.52 billion.

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.

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