Bitcoin soars towards $86,000, but demand remains fragile

This Monday, the price of the main crypto approached $86,000, its highest level since the end of January. However, this recovery remains imperfect, because US spot demand is not yet showing strength comparable to that of the price.

Bitcoin price hits eight-month high

Bitcoin has just crossed $85,000 before getting closer to $86,000, with an increase of almost 6% over 24 hours. Indeed, the crypto now shows a gain of more than 30% since its low point of August 19.

This increase comes despite two major obstacles. The US Federal Reserve raised its key interest rate by 25 basis points, a decision generally unfavorable to risky assets. Additionally, the CLARITY Act, which was supposed to clarify US crypto regulation, also failed to obtain the necessary votes in the Senate.

Some essential data allow us to understand the extent of this movement:

• Bitcoin hits eight-month high;
• Its progression was around 6% over 24 hours;
• The gain exceeds 30% since August 19;
• The loss recorded since January has fallen below 3%;
• The Coinbase premium still showed −0.02 when CryptoQuant read.

This rebound also benefited companies in the sector. Thus, Coinbase gained almost 5% on the stock market, while Strategy shares rose around 8%. Such a reaction reveals that the renewed interest is not exclusively in the spot market.

Coinbase premium remains slightly negative

The Coinbase Premium Index is the main weak point identified. This is an indicator that measures the difference between the price of bitcoin on the Coinbase dollar market and that observed on the BTC-USDT pair on Binance.

A positive premium usually signals that bitcoin is trading higher on Coinbase. It therefore indicates relatively stronger demand from American investors, particularly companies and institutional players. On the contrary, a negative value reflects less sustained demand or higher selling pressure on the American platform.

According to CryptoQuant, the index had fallen to -0.02 when bitcoin was still trading around $81,500. It briefly exceeded zero before returning to the red.

This reading predates the acceleration towards $86,000. However, it therefore does not necessarily describe the exact situation at the top of the session. Its weakness, however, reveals that the increase was not yet based on sustainable outperformance of acquisitions made on Coinbase.

A value really close to zero does not immediately announce a bearish reversal. The desired confirmation would rather be a premium which becomes positive again, remains above zero and progresses at the same time as the price of the crypto.

ETFs and position buybacks support the rise

Other sources provide support for the progression. Bitcoin spot ETFs from BlackRock and Fidelity reportedly raked in nearly $433 million on Friday. These entries contribute to the absorption of bitcoins sold by certain long-term holders.

The closing of bearish positions amplified the movement. More than $658 million in short positions were liquidated in one day across the entire crypto market. Bitcoin made up almost $367 million of that total. These forced buybacks accelerated the rise, without the creation of sustainable demand on their own.

At the same time, Strategy resumed its purchases after a three-week break. The company acquired 950 bitcoins for $75.7 million, at an average price of $79,670. Now she holds 846,000 BTC, acquired for $63.8 billion.

These factors justify why the price can advance despite a negative Coinbase premium. ETF demand, company acquisitions and derivatives liquidations occur through different channels.

Bitcoin has yet to confirm its recovery

Bitwise Chief Investment Officer Matt Hougan believes the market has entered a “crypto spring”. He even projects the bullish cycle “the most powerful and longest” of the history of the sector. This statement remains an anticipation, and not a guarantee on the trajectory of BTC.

The strength of the rebound will now depend on three signals. Thus, the Coinbase premium will have to return sustainably above zero, ETFs will have to maintain positive flows and bitcoin will have to defend the zone between $80,000 and $85,000 after the wave of liquidations.

Maintaining above $85,000 would consolidate the scenario of a recovery fueled by spot acquisitions. Conversely, a rapid pullback accompanied by ETF outflows could indicate that the move to $86,000 was primarily based on closing bearish positions.