Institutions are buying Bitcoin ($BTC), more than five times as fast as miners are producing, and Charles Edwards, founder of Capriol Investments, said that historically that difference occurred right before a big price increase.
Edwards said in a May 4 post that in all historical instances of this supply-demand ratio, the average return in the next month was 24%, but given current levels, it would take 24% longer. $BTC Up to about $96,000.
What the data shows
The 500% figure is arrived at by tracking daily purchases by approximately 450 institutional investors, primarily public companies and ETFs. $BTC It has been mined daily since its halving in 2024.
“Whenever we’ve had this high in the past, prices have spiked over the next week,” Edwards said. “The average return in the case so far is +24% a month from here, or about $96,000.”
Earlier today, Bitcoin topped $80,000 for the first time since January. According to CoinGecko, it has been trading between $78,000 and $80,500 in the past 24 hours, up 20% in the past 30 days.
This rally triggered a wave of forced liquidations, with over $162 million worth of short positions wiped out in 24 hours, based on Coinglass data.
Trading volume also jumped 95% in 24 hours to about $34 billion.
Other analysts are more bullish, although their convictions vary. For example, trader Taiki Maeda expects Strategy to buy $2 billion to $3 billion worth of Bitcoin over the next two weeks through STRC products, writing that acquisitions are likely to “accelerate until May 14.”
You may also like:
- Bitcoin fluctuates after Iran’s latest offer to the US – what’s next?
- MSTR rose 33% in April, ending a 9-month losing streak
- XRP and SOL holders get new benefits with interest-free credits from Nexo
Chartist Ali Martinez pointed to a multi-decade upward trend line. $BTC has rebounded from 2017, 2018, 2020, and 2022, and argues that the recent drop to $65,000 suggests “the bottom may be in.”
the other side of the coin
$BTC’s rise of over $80,000 follows last month’s 12% rally, which CryptoQuant says was mostly driven by perpetual futures rates rather than spot trading.
It noted that Bitcoin’s apparent demand metric, which tracks 30 days of on-chain spot activity, remained negative throughout the April rally.
“The divergence between rising prices and shrinking spot demand is one of the clearest on-chain signals that rising prices are speculative rather than structural,” the company wrote, adding that this demand structure mirrors what was seen at the start of the 2022 bear market.
