Bitcoin (BTC) has performed exceptionally over the past week, rising 30% since the November 5 US election. The flagship cryptocurrency has surpassed its March all-time high (ATH), recording a novel high almost every day for the past seven days. Bitfinex analysts noted that the market remains “relatively stable” despite increased speculative activity.

Bitcoin’s “fair value” priced at a higher level

After Donald Trump’s victory last Tuesday, the cryptocurrency market saw a massive surge, reaching a market capitalization of $3.05 trillion. Bitcoin led the post-election rally with a 30% price enhance, approaching $90,000 today.

According to Bitfinex Alpha reportrally “underscores the positive reaction to the election result, with investors preparing for potential economic stimulus and regulatory changes.”

During the March highs, BTC’s realized profit volume peaked at $3.1 billion. Since then, the amount of profits realized has gradually decreased, “reaching equilibrium”.

As the report notes, there has been a reset of supply and demand forces, which indicates, in addition to the recent price enhance, that “the market is now pricing in a higher ‘fair value’ for Bitcoin.” At the same time, the cryptocurrency continues to discover prices.

Moreover, profit taking above $70,000 has been much smaller than previous occasions when Bitcoin has traded above this range, despite a structural enhance in profit taking.

Bitfinex analysts believe this means “a new wave of demand is entering the market,” supported by Spot Bitcoin ETFs buying after the election. Moreover, he suggests that interest from fresh investors “may ensure further growth in the near term.”

BTC enters a “new phase”

The report highlighted record BTC ETF inflows of approximately $2.28 billion in three days. These results marked a significant enhance over pre-election de-risking, which saw cryptocurrency investment products record their second-largest single-day outflows.

By CoinShares dataBitcoin ETFs closed the US election week with an inflow of $1.8 billion, and started the week with a positive net flow of $1.1 billion. These results indicate a return in demand for the flagship cryptocurrency as the market adjusts to novel BTC price levels.

Bitfinex analysts explained that there was significant supply from March through August and insufficient sustained buying pressure to absorb it. The recent enhance in demand suggests a noticeable shift as purchasing interest “absorbs selling pressure at an all-time high and stabilizes market dynamics:

Now it appears that we are entering a novel phase where the amount of profit taking when BTC reaches an all-time high is much lower given the amount of novel demand entering the market after the election. This demand helps absorb the still low sales pressure, suggesting a healthier market environment and potential for further growth.

Meanwhile, Open Interest (OI) in Bitcoin futures and perpetual contracts surged to ATH, reaching $45.43 billion. The report explains that this signals an enhance in speculative activity, but details that the market remains “relatively stable” as OI and BTC prices “are in balance at elevated levels.”

Ultimately, Bitfinex anticipates some consolidation soon with a potential drop to $77,000. A correction towards this level would close the CME BTC gap and strengthen Bitcoin’s position to climb to even higher levels.

At the time of writing, Bitcoin is trading at $86,225, up 5% on the daily time frame.

Featured image from Unsplash.com, chart from TradingView.com