Bitcoin (BTC) experienced a significant rally, surging over 5% on Wednesday after bouncing back from a crucial support zone between $94,300 and $96,600 earlier this week. The leading cryptocurrency revisited its previous all-time high (ATH) range of $101,219 to $101,998 before making a slight dip to around $100,780 on Thursday, December 12, during the mid-London trading session.
The Bitcoin Futures Open Interest (OI) saw a 6% increase, reaching approximately $62.8 billion at the time of this report. Due to substantial daily liquidations in the leveraged market recently, Bitcoin’s funding rate has decreased significantly, falling below the recent norm.
Bitcoin Whales Relentlessly Accumulate
The amount of Bitcoin held on centralized exchanges has been on a sharp decline over the past year, largely driven by increased demand from institutional investors. Over the last 30 days, the supply of Bitcoin on CEXes has decreased by about 120,000, bringing the total to approximately 2.23 million at the time of writing.
According to market data provided by Cryptoquant, Bitcoin has been drawing in around $80 billion from long-term investors each month over the past year. Notably, the recent capital inflows into Bitcoin have significantly surpassed fund inflows witnessed over the past 15 years.
Additionally, whale investors are persistently accumulating Bitcoin in anticipation of the United States potentially approving a strategic BTC reserve. Current market data reveals that US spot Bitcoin ETFs recorded a net cash inflow of approximately $223 million on Wednesday, pushing the cumulative total net inflow to about $34.58 billion.
What Lies Ahead for Bitcoin?
From a technical perspective, Bitcoin’s price action is sending a distinct signal compared to the fundamental data. On the daily chart, Bitcoin’s price against the US dollar has formed a potential double top, accompanied by a bearish divergence on the daily Relative Strength Index (RSI). This pattern suggests a possible midterm price correction.
If Bitcoin consistently closes above the $102,000 mark in the upcoming weeks, it may set sights on $120,000, aligning with the 0.618 daily Fibonacci extension. Conversely, Bitcoin’s price might retrace toward the support level above $85,000 in the coming weeks before resuming its bullish rally early next year.
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Frequently Asked Questions (FAQs)
How do Bitcoin ETFs impact BTC price movements?
Bitcoin ETFs are known to attract institutional investments, thereby increasing demand and reducing supply, which often leads to a rise in BTC prices.
What is the future outlook for Bitcoin price after surpassing $100k?
If BTC breaks the $102,000 resistance, it may target $120,000. Alternatively, it could retrace to the $85,000 support level before continuing its bullish trend into 2024.
