Institutions are driving Bitcoin's recent rally, according to Charles Edwards, founder of Capriole Investments. He argues that institutional demand has surged, absorbing six times the daily Bitcoin supply, and this has pushed his models into a bullish stance. The question on everyone's mind is: Is $96,000 next?
Edwards' analysis focuses on several key indicators.
First, his models, Trend King and Macro Index, have turned bullish around $71,000. Trend King, a technical strategy, and Macro Index, a fundamentals-only model, both signal a broader regime shift rather than a short-term trade.
Second, derivatives data shows an "extremely bullish long-term signal" after excessive shorting. This suggests that the market positioning has reset, and the current rally is not just chasing overheated longs but emerging from a period of defensive trading.
Third, the Spent Output Profit Ratio (SOPR) has broken above 1, indicating a return of positive price and on-chain momentum. This is historically a strong signal for Bitcoin.
However, there are caveats. Edwards highlights longer-term equity risks, including weakness in the advance-decline line, high oil prices linked to the Iran war, and the gold-to-stock ratio.
Despite these risks, Edwards remains optimistic. He believes the current breakout is supported by a favorable VIX regime and collapsing credit spreads, and the S&P 500's recent all-time high is a positive sign.
In my opinion, the key takeaway is that institutions are increasingly buying Bitcoin, and this is pushing the price higher. However, the market is not without risks, and investors should remain cautious. The question of whether Bitcoin will reach $96,000 remains open, but the current setup is certainly bullish.
