Bitcoin Accumulates $732B in New Capital as Market Dynamics Evolve

Bitcoin market transformation

Bitcoin experienced a notable rise on Wednesday, increasing by 7.5% over the past 24 hours to exceed $93,000, as analysts anticipate further record highs. This surge is occurring amid unprecedented capital inflows, a growing realized market cap, and decreasing volatility, indicating a significant shift in market structure, as highlighted in a recent joint report by Glassnode and Fanara Digital.

Key Takeaways:

Bitcoin has drawn in a record-setting $732 billion in new capital since reaching cycle lows in 2022.
Overcoming the resistance at $93,000 is essential for the continuation of its recovery.

Bitcoin's recent performance indicates robust market activity, as it has successfully gathered a remarkable $732 billion in new capital since the 2022 cycle low. Surpassing the $93,000 resistance is critical for maintaining the upward trend.

BTC/USD hourly chart. Source: Cointelegraph/TradingView

Bitcoin's Capital Accumulation

Bitcoin saw a sell-off that dropped its price by as much as 36% from its peak of $126,000, reached on October 6, heightening concerns of a potential crypto winter. However, new findings from Glassnode and Fanara Digital revealed that Bitcoin has attracted more than $732 billion in net new capital since the low of the 2022 cycle.

The report states, “The 2022–2025 cycle alone has gathered more capital than all previous cycles combined,” resulting in a realized market cap of approximately $1.1 trillion, while the spot price surged by over 690% to the peak of $126,000 from a low of $16,000.

Related: Bitcoin Rallies to $93K After Sunday Dip, Analysts Eyeing for $100K

This remarkable growth highlights the significant influence of institutional adoption and the emergence of regulated investment vehicles such as spot ETFs.

Bitcoin realized cap
Bitcoin: Realized cap since cycle low. Source: Glassnode

Bitcoin's realized cap measures the total capital invested in Bitcoin across the network. This metric typically decreases during bear markets, but current trends suggest otherwise. Additionally, Bitcoin's long-term volatility has almost halved, dropping from 84.4% during the peak of the 2021 bull market to 43% now. This reduction illustrates a sustained decrease in systemic volatility.

The report further notes that this decline reflects “Bitcoin’s increasing market depth and institutional participation” through ETFs and treasury organizations.

Bitcoin annualized realized volatility
Bitcoin: Annualized realized volatility. Source: Glassnode

Typically, bear markets begin with rising volatility and reduced liquidity, which is not the scenario we are currently witnessing, as volatility retreats in a long-term structural manner.

The report also indicates that the demand for spot Bitcoin ETFs has been “exceptional” since their introduction in January 2024. Currently, these investment vehicles hold around 1.36 million BTC, equating to about $168 billion in assets under management, or roughly 6.9% of the circulating supply.

Importance of Breaking the $93,000 Barrier

According to data from Cointelegraph Markets Pro and TradingView, Bitcoin was trading in a region of high ask liquidity. “BTC faced strong resistance at the $93K threshold last week; however, as it strives to break through again, we’re observing large clusters of short liquidations,” Glassnode detailed in a post on X on Wednesday.

Bitcoin liquidation heatmap. Source: Glassnode

Analyst Daan Crypto Trades highlighted the “local horizontal resistance” above the $93,000 mark, arguing that successfully turning this resistance into a new support zone is crucial to pushing the BTC/USD pair to $98,000.

The BTC price has formed a “higher high and a higher low,” indicating a bullish structure in the current market timeframe. Daan Crypto Trades added:

BTC/USD four-hour chart. Source: Daan Crypto Trades

As previously reported by Cointelegraph, growing optimism surrounds Bitcoin's recovery, with the Bollinger Bandwidth indicator suggesting the possibility of a price surge akin to that seen in 2023 towards the year-end.