A report from Coinbase and Glassnode reveals growing optimism in the crypto market, despite mixed signals regarding Bitcoin and Ethereum ETFs.
Coinbase and analytics firm Glassnode have released a report indicating a notable shift in market sentiment towards optimism, despite ongoing macroeconomic challenges.
A survey involving 100 institutional and retail investors found that approximately 73% consider the current Bitcoin price to be undervalued. The report also highlighted a change in the net unrealized profit indicator, moving from a state of fear to one of optimism.
Analysts observed a significant transformation in Ethereum's supply dynamics. In the first quarter, the volume of Ether held by short-term investors fell by 38%, while holdings by long-term investors grew by 1%. This trend suggests a potential exit of speculative investors from the market.
While Coinbase expresses a sense of cautious optimism regarding a potential recovery in digital asset prices over the quarter, some data suggests a cooling interest in exchange-traded funds (ETFs). As of April 28, Spot Bitcoin ETFs experienced a net outflow of $89.68 million, with BlackRock's IBIT fund facing the most significant losses at $112.25 million.
Similarly, the Ethereum ETF sector saw a net withdrawal of $21.8 million, with BlackRock's ETHA fund losing $13.17 million.
Potential Bitcoin Correction Ahead
On-chain analyst Woominkyu has cautioned about the possibility of a Bitcoin price correction to the $74,000–75,000 range. He attributes this prediction to increased exchange reserves and notable activity from large investors.
On April 27, Bitcoin's net inflow to exchanges surged to 9,905 BTC, marking the highest level in 30 days. During this time, Bitcoin struggled to maintain its price above the $78,000 resistance level.
Woominkyu noted that the Exchange Whale Ratio, which indicates the proportion of deposits from the largest transactions, has climbed to 0.7, suggesting that the top 10 transactions accounted for over 70% of total deposits. This implies that large holders are moving assets to exchanges for potential sale.
From April 25 to April 28, total exchange reserves increased from 2.666 million BTC to 2.677 million BTC. The analyst warns that if buyers do not absorb the rising supply, Bitcoin may test the support zone of $74,000–75,000.
In a related note, Bitwise CIO Matt Hougan pointed out that the firm has driven Bitcoin's recent rally by acquiring $7.2 billion worth of cryptocurrency over the past eight weeks. These purchases are financed through the issuance of perpetual preferred shares (STRC), which offer an 11.5% dividend yield and are backed by Bitcoin reserves valued at $63 billion.
Hougan anticipates that the Strategy will continue attracting capital via STRC until the company's liabilities exceed 50% of its crypto assets, which currently stand at 33%. On April 28, Bitcoin's price fell to $76,337 following an unsuccessful attempt to maintain above $79,000.
