Did you miss Bitcoin’s $90K dip? 3 key indicators showing it was a local bottom.

The recovery has reached across the broader cryptocurrency market, with total market valuation rising 7.3% between Nov. 26 and 28 to $3.32 trillion. Market participants are now looking for clues as to whether Bitcoin (BTC) has found support at $90,000 before continuing its march toward $100,000.

Coinbase Premium Index: BTC Demand Returns

Bitcoin’s recent drop from the all-time high of $99,655 reached on Nov. 22 to a weekly low of $90,742 on Nov. 26 may be attributed to a decrease in demand from the United States. That was evident by a sharp drop in the Coinbase Premium Index over that period.

The Coinbase Premium Index measures the difference in pricing between the BTC/USD pair on the largest US exchange, Coinbase, and Binance’s BTC/USDT equivalent. The chart below shows that the index has bounced back, rising from -0.0387 on June 26 to the current value of 0.091.

Bitcoin Coinbase Premium Index
Source: CryptoQuant

A rising Coinbase premium is a proxy for increasing demand from US retail investors. Julio Moreno, head of research at onchain analytics platform CryptoQuant, said in a Nov. 27 post on X: “Bitcoin’s latest rebound from the Nov. 26 local low has shown resilience, and the market appears to be gaining traction as institutional players continue to pour capital into digital assets.”

Moreno shared a chart showing Bitcoin’s apparent demand continuing to rise within the expansion territory, signaling that new investors were entering the market.

Bitcoin apparent demand; 30-day sum
Source: CryptoQuant

Spot Bitcoin ETF Inflows Flip Positive

Bitcoin’s ongoing recovery aligns with renewed inflows for US-based spot Bitcoin exchange-traded funds (ETFs) as they flipped positive on Nov. 26. The US spot Bitcoin ETFs returned a daily net inflow of $103 million on Nov. 26, ending a two-day streak of net outflows totaling $558 million.

Notably, the Bitwise Bitcoin ETF recorded the largest inflow of $48 million on the day, with BlackRock’s IBIT recording no flows for the first time since Nov. 15. US spot Bitcoin ETFs have attracted roughly $30.3 billion in cumulative net inflows to date.

Additional data shows that institutional investors increased their exposure to digital assets. Bitcoin investment products saw inflows of $3.07 billion, making up more than 98% of the total inflows during the week ending Nov. 22.

This points to a renewed appetite for Bitcoin investment as institutions recognize its potential as a hedge against inflation and rising interest rates.

Institutional Confidence and Market Sentiment

institutional confidence continues to drive demand, with several major bulls signaling their support for Bitcoin. Leading cryptocurrency exchanges such as Coinbase, Binance, and Kraken have all seen significant inflows into their spot Bitcoin positions over the past month, with some platforms even reporting record-high trading volumes.

institutional investors also appear to be diversifying their portfolios away from traditional asset classes in response to inflationary pressures and tighter monetary policies. This shift toward alternative assets has been a key driver of Bitcoin’s recent rally.

Market Sentiment and Technological Advancements

Despite the broader market corrections seen earlier this year, Bitcoin has maintained its dominance as the leading cryptocurrency by market capitalization. The resilience of Bitcoin’s price amid macroeconomic uncertainty suggests that institutional players remain confident in its long-term prospects.

Technological advancements continue to play a key role in driving adoption and acceptance of Bitcoin, with major companies such as Mastercard, Visa, and PayPal recently expanding their Bitcoin payment services globally. These developments are further fueling demand from institutional investors who see Bitcoin as a critical component of a future-proof financial ecosystem.

Conclusion

As the global economy faces headwinds from inflation, rising interest rates, and geopolitical tensions, Bitcoin remains a standout asset that offers stability and diversification for institutions and retail investors alike. The ongoing rebound in market capitalization, coupled with increased ETF inflows and institutional exposure, underscores the growing confidence in Bitcoin’s ability to outperform traditional asset classes over the long term.

Institutional players are playing an increasingly important role in shaping Bitcoin’s trajectory, as they seek to hedge against inflation and diversify their portfolios in a low-yield environment. With continued macroeconomic headwinds ahead, institutional investors may remain steadfast in their commitment to Bitcoin, reinforcing its position as a key asset class of the future.

The broader cryptocurrency market is also showing signs of life, with several smaller cryptocurrencies beginning to make aName their mark on the landscape. While Bitcoin remains the dominant force, these emerging markets offer opportunities for institutional players looking to expand their investment horizons.

In summary, Bitcoin’s resilience in the face of macroeconomic challenges underscores its potential as a long-term investment opportunity. With institutional confidence and technological advancements driving demand, Bitcoin is well-positioned to continue its upward trajectory in the months ahead.