Key takeaways:
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Bitcoin’s price is retracing, but strong ETF inflows, high network activity and whale accumulation suggest BTC is on track to $140,000.
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Spot Bitcoin ETFs saw $2.9 billion in net inflows in two weeks, mirroring past rallies.
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Declining exchange balances and a rising transaction volume Z-score suggest increasing overall demand.
Bitcoin (BTC) price was down 1.4% over the last 24 hours. It traded 6% below its all-time high of $109,000, reached on Jan. 20. Nevertheless, several fundamental, onchain and technical metrics suggest that Bitcoin’s upside is not over.
Spot Bitcoin ETF inflows mirror past BTC rallies
Bitcoin’s latest recovery was accompanied by strong investor appetite for spot Bitcoin exchange-traded funds (ETFs), which recorded $2.9 billion in net inflows over the last two weeks.
The chart below shows that after the launch of the US-based spot Bitcoin ETFs in January 2024, these investment products saw net inflows of about $8.5 billion between Feb. 13, 2024, and March 13, 2024, peaking at a record single-day inflow of $1.045 billion on March 12, 2024.
Similarly, between Nov. 6, 2024, and Dec. 16, 2024, cumulative daily inflows hit $5.7 billion, aligning with Bitcoin’s 60% rally from $67,000 to $108,000 over the same period.
If ETF inflows continue, Bitcoin is likely to resume its uptrend toward new all-time highs.
Bitcoin market volatility index: risk-on
Increased inflows into spot Bitcoin ETFs signal high risk-on sentiment, as evidenced by a drop in the CBOE Volatility Index (VIX), which measures 30-day market volatility expectations.
Bitcoin network economist Timothy Peterson highlighted that the VIX index has dropped substantially to 18 from 55 over the past 25 trading days.
A VIX score below 18 implied a “risk-on” environment, favoring assets like Bitcoin.
The analyst said:
“This will be a ‘risk on’ environment for the foreseeable future.”
Peterson’s model, which has a 95% tracking accuracy, predicted a $135,000 target within the next 100 days if the VIX remains low.
Strong Bitcoin accumulation continues
Reinforcing the risk-on sentiment are Bitcoin whales, who have been increasing their holdings even as the price rallied. Glassnode data shows the Bitcoin Accumulation Trend Score (ATS) at 1 (see chart below), which signifies intense accumulation by large investors
According to Glassnode, the spike in trend score indicates a…
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