Bitcoin is resilient, but leverage is missing and demand still tepid

“Bitcoin is resilient,” CZ, founder of Binance, declared on X.

The view is consistent with how bitcoin and the wider crypto market have surged and held on to gains after the initial knee-jerk reaction lower in early Asian trading on Wednesday following reports of a Democratic sweep in the midterm elections.

However, as of writing, two things are missing, and both call for caution on the part of bulls.

First, there is little sign of fresh leverage entering the market, as evident from bitcoin’s futures open interest (OI), which has held largely unchanged at $53.40 billion, according to data source Coinglass. The same is true for many other coins, including SOL, HYPE, DOGE, NEAR and others, where OI has either held flat or declined amid the price rise.

This is a sign of a lack of fresh capital inflows, contrary to new inflows chasing upside when markets rally.

Secondly, spot-side indicators also remain tepid. The spot ETFs listed in the U.S. pulled in just $74 million in investor money on Wednesday. This follows outflows of over $400 million in the first two trading days and over $500 million last month, according to data source SoSoValue.

The Coinbase Premium indicator, a widely tracked measure for assessing relative demand from U.S.-based investors, also remains negative. Historically, this has been positive during sustained uptrends.

Read futures and spot market activity together, and it appears price gains were driven largely by the unwinding of shorts. In the past 24 hours, crypto futures shorts worth $450 million have been liquidated, with BTC alone accounting for $300 million of that — the highest since Sept. 21.

Analysts at Marex say spot demand now needs to take over.

“BTC reclaimed $80k as lower yields, a weaker dollar and cheaper oil revived the risk bid. Shorts funded the first leg. Spot flows and a cleaner derivatives structure now need to carry the second,” they said in an email.

India-based FIU-registered Giottus called it a relief rally and awaits more signs of uptrend confirmation.

“Treat this as a relief rally until stronger confirmation emerges. Avoid chasing sharp moves. Use staggered entries, keep position sizes modest and watch ETF flows and upcoming US labour-market data before increasing exposure,” the exchange’s CEO Vikram Subburaj said. Stay alert!

What’s trending

• Trump Media moves $342 million in bitcoin to Crypto.com, blockchain data show (CoinDesk): A wallet supposedly linked to Trump Media & Technology Group, the parent company of Truth Social, has transferred a large amount of bitcoin to Crypto.com. The move raised renewed questions about whether the company is reducing its crypto treasury.
• Hong Kong passes law requiring crypto exchanges to report customer transactions to tax authorities(CoinDesk): Hong Kong passed a law requiring crypto exchanges and other covered service providers to collect customer and transaction data for tax purposes from 2027, with the information to be automatically shared with overseas tax authorities from 2028.
• World shares mostly gain after US midterm elections as AI-related stocks sink (AP): World shares were mostly higher Thursday, though heavy selling of artificial intelligence-related stocks offset gains for some markets following the U.S. midterm elections.
• AI stocks, oil fall as investors bet on change after US election 'blue wave' (Reuters): Chip stocks and the dollar fell on Thursday, while oil steadied around recent ​lows and broader share prices, gold and other assets rose after a sweeping Democratic victory in US midterm elections raised hopes for an end ‌to the U.S.-Iran war.

Today’s signal

Bitcoin: Coinbase premium indicator. (Coinglass)

Bitcoin’s Coinbase Premium indicator remains negative, extending a weeks-long bearish signal streak.

It means bitcoin is trading at a slight discount on Nasdaq-listed Coinbase relative to offshore giant Binance.