Bitcoin Ends Q1 with Impressive Performance, Spot Demand Driving Rally

According to data by Glassnode, a blockchain analytics firm, Bitcoin’s value increased by over 70% in Q1. This remarkable performance has caught the attention of many investors and analysts alike.

To better understand the trend of Bitcoin’s performance, Glassnode analyzed the spot versus derivatives trend over Q1. The analysis showed that the network is much healthier at the end of the quarter than it was at the beginning of the year.

One of the significant indicators of Bitcoin’s health is the exchange balance, which is now flat year-to-date, with roughly 2.28 million Bitcoin on exchanges. This means that more investors are holding onto their Bitcoin instead of selling it. Additionally, demand started to return after the collapse of SVB, which is a positive sign for the cryptocurrency market.

According to Glassnode, the balance of the exchange

Another interesting finding from the Glassnode report is that futures open interest is now at a one-year low, with roughly 300,000 Bitcoin liquidated from the 2022 peak in October. This means that investors are less interested in holding onto Bitcoin futures contracts, which could be attributed to the increased spot demand in recent weeks.

According to Glassnode, the comparison between options and futures.

Finally, options open interest saw a record-breaking amount of $4 billion worth of options expiring on March 31. Roughly 130,000 Bitcoin have been unwound in contracts from the exchange Deribit. This indicates that investors are taking profits from their options positions, which could lead to a decrease in volatility in the Bitcoin market.

Overall, the rally in Bitcoin price has been driven by spot demand in recent weeks. This means that more investors are buying Bitcoin on exchanges, which is driving up the price of the cryptocurrency. It will be interesting to see how Bitcoin performs in the coming months, especially as more institutional investors enter the market.

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