Bitcoin’s latest rally is being driven by a sharp acceleration in institutional demand, according to Capriole Investments founder Charles Edwards, who says large buyers are now absorbing roughly six times the amount of BTC mined each day. The setup has pushed several of Capriole’s long-running Bitcoin models back into bullish territory, with Edwards arguing that both on-chain and technical conditions now favor a continuation higher.
In a May 5 Substack post titled “Institutions are Guzzling Bitcoin,” Edwards said institutional flows have intensified since his previous update, rising to around 577% of daily mined supply. Bitcoin, he noted, has gained 12% over the same period.
“Institutions are slurping up 600%+ of Bitcoin’s daily mined supply. Every time it’s been this high before, price has shot up over the next week. As the chart shows, we’ve typically seen double digit returns from here with a couple of weeks in all prior cases.”
Based on that historical pattern, Edwards said a comparable move would put Bitcoin near $96,000. The argument is straightforward: if institutional demand continues to exceed new issuance by such a wide margin, available supply tightens quickly, especially in a market where long-term holders have already shown less willingness to sell into weakness.
Capriole Models Turn Bullish Bitcoin From $71,000
Edwards also pointed to Capriole’s internal models, including Trend King and Macro Index, both of which flipped long around $71,000. Trend King, described by Edwards as the firm’s longest-running live trading strategy, is currently leveraged long Bitcoin. The model is primarily technical, though it also incorporates selected on-chain inputs.
Macro Index, Capriole’s fundamentals-only Bitcoin model, has also moved into what Edwards described as “recovery” mode. The model tracks more than 200 on-chain and macro market data points, providing an aggregate view of Bitcoin’s fundamental backdrop. Edwards said its trends “tend to be sticky,” implying that the signal is less about a short-term tactical trade and more about a broader regime shift.
Derivatives data adds another layer to the bullish case. Capriole’s Bitcoin Perps Heat indicator, which tracks relative extremes in perpetual swap markets by measuring funding rates and open interest across a four-year normalization window, recently showed what Edwards called an “extremely bullish long term signal” following excessive shorting.
That matters because market positioning appears to have reset before the breakout. Edwards wrote that “complete capitulation on derivatives markets occurred in March/April,” suggesting that leverage had been flushed out before Bitcoin’s latest move higher. In that framing, the rally is not simply chasing overheated longs; it is emerging after a period in which traders were leaning too defensively.
SOPR Breakout Confirms On-Chain Momentum
Spent Output Profit Ratio, or SOPR, is another key piece of the thesis. Edwards highlighted that SOPR had spent significant time below 1, a zone he described in the previous issue as historically offering “great Bitcoin opportunities.” In the latest note, he said the metric has now closed back above 1, signaling a return of positive price and on-chain momentum.
“Bitcoin looks incredibly strong here. It’s also supported by relative strength against all markets, having bottomed and outperformed since the Iran war started. We see consistent strength across technical and fundamental data for Bitcoin today.”
The equities backdrop is more mixed, but still broadly supportive of risk assets in Edwards’ view. He said Capriole’s “quiet strong market” strategy remains risk-on, while collapsing credit spreads and a favorable VIX regime are backing the current breakout. The S&P 500 has also printed a fresh all-time high, with Edwards identifying 7,000 as the key weekly level to watch.
There are caveats. Edwards flagged weakness in the advance-decline line, high oil prices linked to the Iran war, and the gold-to-stock ratio as longer-term equity risks. But for now, he framed those as warnings rather than a confirmed bearish turn.
At press time, Bitcoin traded at $81,429.
