Have you purchased the dip? Three indicators indicating the local bottom for Bitcoin was $90K

Bitcoin BTCUSD has recently recovered $95,000 from its local low of $90,742 on November 26. The recovery has also been observed in the larger cryptocurrency market, as evidenced by the 7.3% increase in market capitalisation to $3.32 trillion between November 26 and November 28.

Market participants are now looking for clues on whether Bitcoin has found support at $90,000 before continuing its march toward $100,000.

Coinbase Premium Index: Demand for Bitcoin Rebounds

A recent decline in demand from the US may be the reason for Bitcoin's decline from its new all-time high of $99,655 on November 22 to a weekly low of $90,742 on November 26. A steep decline in the Coinbase Premium Index over that time frame made that clear.

The Coinbase Premium Index calculates the price differential between Binance's BTCUSDT counterpart and the BTCUSD pair on Coinbase, the biggest US exchange.

The index has recovered, as seen in the chart below, going from -0.0387 on June 26 to the present figure of 0.091.

Growing demand from US retail investors is indicated by a rising Coinbase premium.

In a post on X on Nov. 27, Julio Moreno, head of research at onchain analytics platform CryptoQuant, stated that "Bitcoin demand growth is accelerating again after the recent price correction."

Moreno posted a chart that indicates that new investors are joining the market as Bitcoin's apparent demand is increasing within the expansion region.

"The expansion of demand is what will drive Bitcoin's price higher."

Inflows into Bitcoin ETFs turn positive

The continued rise in BTC is consistent with fresh investments in US-based spot Bitcoin exchange-traded funds (ETFs), which saw a bullish turn on November 26.

After two days of net outflows totalling $558 million, the US spot Bitcoin ETFs saw a daily net inflow of $103 million on November 26.

Notably, BlackRock's IBIT saw no inflows for the first time since November 15; instead, the Bitwise Bitcoin ETF (BITB) saw the biggest inflow of $48 million for the day.

To date, US spot Bitcoin ETFs have received a total of almost $30.3 billion in net inflows.

Institutional investors grew their exposure to digital assets, according to additional data. Over 98% of the overall inflows during the week ending November 22 came from Bitcoin investment products, which attracted $3.07 billion in inflows.

This suggests that institutions are once again interested in Bitcoin investment products, which is generally a good thing.

Exchanges' bitcoin balances drop to six-year lows.

Despite Bitcoin's surge towards $100,000 while all investors were profiting, the BTC balance on exchanges was declining, according to statistics from CryptoQant.

November saw a further decline in the quantity of Bitcoin on exchanges, falling below 2.4 million BTC, the lowest since November 2018.

As investors shift their money to other places, including self-custody wallets, declining Bitcoin balances on exchanges indicate that there is less supply available for possible sale.

There is no investment advice or recommendation in this article. Every trading and investment decision carries some risk, so readers should do their own research before making a choice.

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