Bitcoin (BTC) Surges to $104k as Spot Market Dominates

Bitcoin (BTC) has experienced a significant rally, reaching a high of $104,000, primarily driven by strong demand in the spot and ETF markets, according to Glassnode’s latest insights. This surge in price is attributed to a robust accumulation phase and a notable short squeeze in the derivatives market.

Spot Market Demand Drives Bitcoin Rally

The recent rally from $35,000 to $104,000 has been fueled by substantial accumulation in the spot market, as evidenced by on-chain volumes. Key accumulation zones have been identified between $93,000 and $95,000, providing short-term support. Major exchanges like Coinbase have seen intense net buying pressure, indicating a ‘buy-the-dip’ mentality, while Binance’s selling pressure has eased.

Additionally, ETF inflows peaked at $389 million per day in late April, contributing significantly to the upward momentum. Although these inflows have slowed to $58 million per day, they continue to support the bullish trend.

Derivatives Markets Lagging Behind

Despite the strong spot market performance, derivatives markets have struggled to keep pace. The open interest in perpetual futures markets has shown a contraction due to a short squeeze, which liquidated many leveraged short positions. This reduction in open interest, from 370,000 BTC to 336,000 BTC, suggests a healthier market with less excessive leverage.

Funding rates on major exchanges have remained neutral, indicating a lack of excessive long-side leverage, which is a positive sign for sustained bullish momentum.

Institutional Interest Remains Strong

Institutional investors have shown continued interest in Bitcoin, particularly through spot ETFs. The weekly average net inflow to ETF wallets reached a peak of $389 million per day, reflecting robust institutional demand similar to previous market rallies in 2024.

Options Market Shows Bullish Sentiment

The options market has also indicated a shift towards bullish sentiment. The 1-Month 25 Delta Skew has dropped to -6.1%, showing that traders are speculating more on upside movements, further reinforcing the optimistic outlook for Bitcoin.

Overall, Bitcoin’s rally to $104,000 has been predominantly spot-driven, with strong on-chain accumulation and supportive off-chain flows. While derivatives markets are catching up, the current market dynamics suggest a sustained bullish trend with institutional support.

For further insights, visit the Glassnode website.

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