After trading above $74,000 again on March 17 of this year, Bitcoin (BTC) price is showing fresh bullish momentum amid rising institutional demand.
This is explained by Glassnode, a company specializing in metrics. On-chain and Financial Analysis, the latest report published on March 16th, analyzes current market structure and investor behavior.
According to the company, Current situation shows ‘mixed but constructive’ signsa continuous upward trend is not yet clearly confirmed, but indicates a gradual improvement.
The main driving force of the movement Bitcoin Exchange Traded Fund (ETF) activities Cash in America.
In the chart above, the blue line represents net fund flows into the ETF and the gray line shows the price of BTC. When the blue line turns positive, it means there is more money coming in than going out, reflecting buying pressure.
Meanwhile, the green and red bands indicate the historical range of the indicator. Green zones indicate high levels of capital inflows (strong demand) and red zones indicate low levels or capital outflows. This allows for contextualization Are current trends at extreme levels or within normal market ranges?
In this regard, Glassnode experts point out that “net inflows into spot ETFs reached $581.8 million last week (March 9-13), indicating strong demand from institutional investors.”
This data is important because it shows that the current momentum is not just coming from retail investors, but from large institutional capital that is accessing the market through these regulated products.
It should be noted that these financial instruments perform well. Directly affects the price of BTC. When investors buy shares in these funds, the ETF issuer must buy the underlying asset (in this case, a digital currency) in the market to back those shares.
This mechanism creates real buying pressure. Effective purchase of assets, not just financial exposure. The more money flows into BTC, the more direct demand for BTC increases and the price tends to rise.
Conversely, if capital outflows occur, the fund may be forced to sell some of its holdings, creating downward pressure.
Volume decreases, but participation does not disappear
However, it’s not all positive for ETFs. Looking at the weekly trading volume of these ETFs, it has fallen from over $40 billion in mid-February to $17.7 billion.
On the chart, the blue line represents trading volume, while the gray line continues to represent price. A decrease in volume indicates a decrease in the intensity of activity.
“Volume remains comfortably above the floor, suggesting that institutional participation has cooled at the last minute but is not gone,” Glassnode analysts said.
This means that interest still exists. However, it does not have the same level of aggressiveness as a strong market phase.
The market gains profits, but no happiness.
The report also talks about what’s happening with the MVRV index, which measures the relationship between the current market value and the value at which an investor acquired the asset (in this case, shares of a Bitcoin ETF). Simply put, it tells you how much you are making or losing on average.
In the graph, the blue line reflects this ratio, This rise shows investors are accumulating profits. at the moment, MVRV is at 1.24, which means a moderate return.. “This indicator is within the normal range, indicating improved positioning without significant profit-taking pressure,” the report highlights.
If MVRV is greater than 1, it means that the current price is higher than the average purchase price, meaning that investors collectively have unrealized gains. The higher the value, the greater the incentive to take profits.
On the other hand, if MVRV is less than 1, it indicates that the price is below the average acquisition cost, meaning that a large portion of the market is losing money. Historically, these levels are usually associated with the yield zone or bearish phase of the cycle.
This is important because in previous cycles, much higher values predicted large declines. In this case, there are no signs of euphoria in the market yet.
Activity on the Bitcoin network does not track movements
One of the weakest points of this report is activity on the Bitcoin network. “Active addresses have declined below the lower limit, suggesting that on-chain activity has not yet confirmed an improvement in market sentiment,” they clarify.
To support their claim, they share a graph showing the number of active addresses.
In this graph, the blue line represents active addresses, i.e. the number of users conducting transactions. A decrease in this metric indicates that network usage is decreasing.
This is important because strong bull markets are usually accompanied by an increase in actual network usage. If the price rises without such activity, the move may be more fragile.
Transfer volume measures the total value moving within the Bitcoin network, i.e. real economic activity.
The blue line on the chart shows this volume, which is still below the historical range (dotted red line) but shows some improvement.
“Remittance volumes increased moderately but remain below typical levels, indicating that economic activity remains moderate,” the analyst said. This supports the idea that the market is improving; However, widespread participation is still lacking.
The report also analyzes developments in the derivatives market. “Derivatives markets reflect a cautious attitude, albeit with increased participation,” Glasnoed said.
Futures open interest is increasing, which means the number of active open contracts is increasing. Signs of growing market exposure to derivatives. A futures contract is a financial product that allows traders to “bet” on the future price of an asset, such as Bitcoin, by waiting for it to rise (long position) or fall (short position) without directly owning that asset.
However, negative funding rates indicate that many traders are still positioning themselves on the downside or hedging their risks. This suggests the following: Although there is further activity, there is no clear certainty about the continuity of the movement.
The dangers of “cow traps”
This mixed scenario opens a discussion about the strength of the rebound. As reported by CriptoNoticias, financial market analyst Willy Wu warned that this price increase could be a “bullish trap.” In other words, the rally has broken through resistance and attracted buyers, but lacks enough fundamentals to sustain it.
This warning is consistent with Glassnode data. Despite strong institutional inflows, network activity remains low and derivatives markets remain cautious.
Taken together, this report describes a market in transition. “While the situation is showing signs of stabilization and gradual recovery, overall confidence has not yet fully recovered.”
For now, BTC’s momentum is being sustained by institutional demand. However, the market has not yet confirmed a definite bullish phase as there is no clear recovery in network activity and investors remain cautious.
