Key Insights:
- BTC rises to $97.9K, pushing over 3M coins held by short-term holders into profit.
- Substantial ETF inflows return after a net outflow regime, supporting strong demand.
- Implied volatility drops across all terms, pointing to increased market stability.
Bitcoin has shot up to $97.9K, with over 3 million short-term-held coins coming back into profit, while ETF inflows returned after a month of consistent outflows. Meanwhile, market volatility has decreased, indicating a more stable environment for price movement and investor activity.
Sharp Recovery in Short-Term Holder Metrics
Bitcoin has demonstrated a strong recovery, reaching $97.9K—its highest level in over two months. This rebound has seen over 3 million BTC return to profit, as per data from Glassnode. Short-Term Holders (STHs), who tend to respond quickly to price swings, now hold fewer unrealized losses.
The chart measuring STH Relative Unrealized Loss indicates a sharp drop from above the +2 standard deviation level to nearly zero. This shift signals that many previously underwater coins are now profitable.
The shrinking orange area in the chart reflects a rapid improvement in sentiment, matching Bitcoin’s price recovery above $90K.
Meanwhile, Bitcoin’s options market is also evolving. The implied volatility (IV) term structure chart shows a decline in both short- and medium-term expectations. IV reflects what traders expect for future price swings.
Two weeks ago, IV for May 2025 contracts was close to 45%. It has since dropped to around 35%. Longer-dated IV, such as for Dec. 2025 or Mar. 2026, remains stable between 50–55%. This implies reduced near-term risk expectations and greater confidence in price stability.
Lower implied volatility often aligns with rising prices. It reflects diminished fear and a lower likelihood of abrupt corrections.
ETF Inflows Return After Net Outflows
US spot Bitcoin ETFs are again experiencing positive inflows after weeks of net outflows. According to a recent report from Glassnode, inflows have come back strongly following a March and early April drop in ETF demand since mid-April. This change corresponds to Bitcoin’s rise from under $70K to almost $98K.
The change is indicated by the end of the pink “Net Outflow Regime” section and the beginning of a blue area that is labeled “Substantial ETF Inflows”.
Many leading ETF providers, such as BlackRock, Fidelity, and Ark/21 Shares, experienced large buying activity during this inflow period. Inflows have shot over 10K BTC on some days.
Demand for ETFs fuels spot price growth. Increased buying of ETFs means more Bitcoins are taken from exchanges and put in custody, thereby reducing supply.
Adding to the above, Bitcoin ETFs attracted more than twice the inflows of investment than gold ETFs, as the bar graph’s hypothetical units indicate. Bitcoin ETFs attracted 100 units, while gold ETFs only got 40.
This change implies that more investors are regarding Bitcoin as a store of value. While gold has played that role for a long time, recent market activity indicates that digital assets may take the lead.
Higher inflows to BTC funds may also be indicative of macro changes or expectations of better long-term performance.
Macro Environment Remains Stable as Fed Holds Rates
The Federal Reserve has decided to maintain interest rates at the same level. According to Santiment, Jerome Powell’s confirmation was what most expected. The crypto market responded mildly to the news, with a small pullback but no sharp moves.
Interest rates play an important role in financial markets. Higher rates can make riskier assets such as crypto less appealing, while stable or lower rates favour growth in such markets. For the time being, the Fed’s decision provides investors with a stable working environment.
The Fed’s “wait and see” position implies that no immediate rate cuts are in the offing, and inflation continues to be an issue. The crypto market participants were closely monitoring it, especially with the recent price hike and robust ETF demand. Although there was no rate cut, the lack of surprise enabled BTC to hold around $98K.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
