BlackRock Bitcoin ETF Trading Hits 6-Month High Amid BTC Price Surge to $72K

Key Takeaways:

1. Record-Breaking Trading Volume: On October 29, BlackRock’s Bitcoin ETF reached a six-month trading high of $3.35 billion, reflecting strong investor interest.
2. FOMO and Market Sentiment: Analyst Eric Balchunas attributes the trading surge to investor FOMO as Bitcoin approaches its all-time high of $73,800.
3. Bitcoin’s Dominance and Liquidity: The surge in ETF volumes highlights increased liquidity and Bitcoin’s rising market dominance, which reached 60% for the first time since 2021.
4. Open Interest Surges: Bitcoin’s open interest reached an all-time high of $43.6 billion, showing heightened investor confidence and speculative interest.
5. Futures Market Dynamics: CME Bitcoin futures hit a record high, with the crypto market in contango, showcasing a favorable outlook for Bitcoin’s future growth.

Read more: What is crypto futures funding rate?

On October 29, BlackRock’s Bitcoin ETF (IBIT) witnessed a massive surge in trading volume, reaching $3.35 billion, marking its highest in six months. This spike, as noted by Bloomberg ETF analyst Eric Balchunas, is largely driven by investors’ fear of missing out (FOMO) as Bitcoin approaches its all-time high of $73,800, currently trading at $72,390.

Speculative Frenzy and Market Reactions

The ETF’s daily inflows were recorded at $599.8 million, contributing to a total of $827 million across all 11 spot Bitcoin ETFs in the United States on the same day. Balchunas speculated that this could either be a sign of speculative buying or increased activity from high-frequency arbitrage traders. He noted, “If this is a FOMO frenzy, we’ll see it show up in the flows next few nights.” Supporting this observation, Galaxy Digital’s Alex Thorn highlighted that October 29 ranked as the third-highest Bitcoin ETF trading day since April 1, 2024.

Liquidity and Trading Volumes

Throughout the day, spot Bitcoin ETFs in the U.S. recorded a combined trading volume of $4.64 billion, with IBIT leading at $3.35 billion. The Grayscale Bitcoin Trust (GBTC) followed with $390.3 million in inflows. While high trading volumes indicate strong liquidity and increased trading activity, they do not necessarily reflect new capital entering the funds. However, IBIT has maintained a steady inflow streak for the past 12 days, totaling $3.20 billion since October 10.

Bitcoin Price Nears All-Time High

Bitcoin price broke past $70,000 on October 29, a significant milestone not seen since June 6, 2024. Crypto analyst Matthew Hyland pointed out that this date marked Bitcoin’s second-highest daily candle in history. As the crypto’s price approached $73,800, several fundamental indicators suggested that Bitcoin is on the verge of reaching new all-time highs.

Key Indicators of a Bull Market

As noted by veteran trader Peter Brandt, Bitcoin’s sustained break above previous trading ranges has inspired traders to target higher price levels between $85,000 and $160,000. The clearing of significant sell walls between $65,000 and $71,000 has also contributed to this bullish momentum. Additionally, Bitcoin’s dominance in the crypto market reached 60% for the first time since March 2021, further fueling investor confidence.

WELCOME HOME #BITCOIN DOMINANCE

It was a long journey, but BTC dominance finally made it to 60% pic.twitter.com/DsxU0OUuyu

— Benjamin Cowen (@intocryptoverse) October 29, 2024

Read: Crypto market bull run

Open Interest and Futures Market Dynamics

Open interest in Bitcoin hit a new all-time high of $43.6 billion, reflecting increased market participant interest. The market has been in contango, with futures prices leading the spot price. On October 29, Bitcoin futures on the CME hit a new all-time high of $74,485. This is attributed to traders engaging in basis trades, where they long the IBIT/spot ETFs and short the CME futures.

Bitcoin open interest. Source: CoinGlass / CoinTelegraph

Spot Bitcoin ETF Inflows

Spot Bitcoin ETF inflows have surged over the past two weeks, with over $3.8 billion entering these instruments. On October 28 alone, ETFs took in $479.4 million, bringing total assets under management to $68.5 billion. Professional traders anticipate further growth as options on these ETFs are expected to launch soon.

In conclusion, the recent trading activity and influx into BlackRock’s Bitcoin ETF underscore a growing investor interest and confidence in Bitcoin as it edges closer to setting new historical price records. The convergence of high trading volumes, increased liquidity, and positive market sentiment suggests a bullish outlook for Bitcoin in the near term.

Source: CoinTelegraph