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Bitcoin ETFs continue to soar as price breaks $50,000

The demand for Bitcoin exchange-traded funds (ETFs) is showing no signs of slowing down, as the latest data from CryptoQuant reveals that the new spot ETFs continue to attract record inflows.

According to CryptoQuant, the new Bitcoin ETFs saw inflows of $340 million during the latest trading session, despite outflows from the Grayscale Bitcoin Trust and Invesco Galaxy of around $160 million.

This indicates that investors are shifting their preference from the older products, which trade at a discount to the spot price, to the newer ones, which track the spot price more closely.

The new Bitcoin ETFs, which were launched in Canada and Brazil earlier this year, have been a game-changer for the crypto market, as they provide a more accessible and regulated way for institutional and retail investors to gain exposure to Bitcoin.

The inflows into the new Bitcoin ETFs have also been putting upward pressure on the price of Bitcoin, as the ETF providers have to buy Bitcoin from the market to back their shares.

Source: CryptoQuant

Yesterday, the price of Bitcoin rose before the US trading session and then moved mostly sideways, hovering around the $52,000 mark.

Some analysts believe that this is due to traders trying to frontrun the buying pressure during the Wall Street session, with ETFs continuing to suck BTC out of the market at the pace of an industrial vacuum cleaner.

After the $50,000 breakout, which occurred on Monday, many are wondering how much more Bitcoin can push without a break. At $53,000, there is a huge gamma exposure (GEX), which could act as first resistance, according to Deribit Insights.

But it is unlikely that Bitcoin will drop significantly if we continue to go at the pace of 300 – 500 million dollars in net inflows per day, especially considering those BTC are removed from the market for a long time.

All this is just around the corner from the halving, which is expected to occur in May 2024. The halving is an event that reduces the supply of new Bitcoins by half every four years, creating a scarcity effect that could boost the price.

The only source of concern is the aggregated open interest, which measures the total value of outstanding futures and options contracts, at levels last seen in spring 2022, during the last crypto market rally before the bear market.

From these levels, any moment is a good time to trigger the classic deleveraging dynamics based on sudden flushes, which could cause sharp price drops and liquidations.

However, some experts argue that the current market conditions are different from 2022, as the market is more mature, diverse, and resilient, and the institutional adoption of Bitcoin is stronger than ever.

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