The price of Bitcoin slowed somewhat over the weekend after a largely positive few days, dropping below $73,000 in the early hours of Saturday, April 11. According to an on-chain analyst, investors are starting to increase their exposure to the world’s largest cryptocurrency by market capitalization.
Are investors using BTC as a hedge against inflation?
In a recent article on Platform X, pseudonymous market expert Darkfost stated that a behavioral shift among Bitcoin investors is currently occurring. The crypto analyst revealed that this trend can be observed through the liquidity rotation over the past few weeks.
Highlighting data from Checkonchain, Darkfost based its analysis on net capital turnover position change, which measures the flow of funds between major cryptocurrencies (Bitcoin, in this case), stablecoins, and fiat currencies. This indicator indicates whether investors are moving their capital toward riskier assets (risk sentiment) or toward risk-free assets (flight-to-safety sentiment).
Additionally, the Capital Rotation Net Position Change metric calculates the 30-day net change in the realized capitalization of the digital asset. According to Darkfost’s post, Bitcoin’s cap hit fell to an extremely low level of -$28.7 billion at the end of February.
Source: @Darkfost_Coc on X
At the same time, as BTC’s realized capitalization declined, the stablecoin’s market cap began to steadily increase, reaching over $6 billion. This increase in the stablecoin’s market capitalization reflects a clear intention by investors to protect their capital, while its coincidence with the realized drop in Bitcoin’s capitalization marks the first time such a rotation has occurred since the previous bear market.
According to Darkfost, this behavior appears to be seeing a gradual change, with Bitcoin’s realized cap returning to -$3 billion, while the stablecoin’s capitalization has declined to -$1 billion. This change suggests that investors are slowly starting to re-expose themselves to the market, as evidenced by BTC’s recent price action.
Darkfost added:
For now, this remains a modest development, but if this momentum continues, Bitcoin could potentially extend the ongoing rally. It is all the more interesting to observe that this dynamic began to emerge precisely when the uncertainties surrounding the Iranian conflict were reaching their peak.
The analyst concluded that it appears some investors are starting to view Bitcoin as a hedge against inflationary and macroeconomic risks, especially in the current global market landscape.
Bitcoin Price at a Glance
At the time of writing, the BTC price stands at around $72,800, reflecting no significant changes over the past 24 hours. According to data from CoinGecko, the leading cryptocurrency is up more than 8% in the weekly period.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image created by DALL.E, chart by TradingView
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