The cryptocurrency market has shown some excitement recently, despite the bearish trend observed last week. In the past 24 hours, Bitcoin, Ethereum, and various altcoins have experienced a notable rebound. Bitcoin, often referred to as the king of crypto, has seen its price rise from $94,000 to $99,000. This upward movement is being dubbed a “Santa Claus rally,” although some analysts suggest it might simply be a shift towards profit-taking. Currently, Bitcoin is holding steady above $98,000, yet traders remain cautious as the year-end expiry approaches.
Meanwhile, Exchange-Traded Funds (ETFs), once considered a saving grace for the crypto market, have hit a rough patch, losing $1.4 billion over just four days. Although ETFs provided a quick boost to the sluggish market earlier this year, their appeal diminished midway. However, market analysts remain optimistic about a potential revival. With the inflow of Ethereum ETFs, the market may be hinting at an early altcoin rally. Let’s explore the details!
US Spot BTC ETFs Are Bleeding
BlackRock’s Bitcoin ETF, the iShares Bitcoin Trust (IBIT), experienced a significant outflow of $188.7 million on Christmas Eve, marking its largest single-day outflow. This outflow is part of a broader trend, with Bitcoin funds witnessing $1.5 billion in outflows over four days between December 19 and 24. Other Bitcoin ETFs, such as those from Fidelity and ARK 21Shares, also reported substantial outflows. Interestingly, Bitwise Bitcoin ETFs were the only ones to record an inflow during this period.
Altcoins Take the Lead
In the meantime, Ethereum ETFs are progressing slowly but surely, capturing traders’ growing interest in altcoins as Bitcoin’s influence slightly wanes. During the downtrend, Ether funds registered $53.6 million in inflows, followed by a $130.8 million inflow the following day. Despite a sluggish start earlier this year, analysts speculate that Ethereum may outperform Bitcoin by January 2025, as the ETH/BTC ratio continues to show strength.
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What’s Next for Bitcoin?
The recent outflows from BlackRock’s Bitcoin ETF and the broader trend of Bitcoin ETF withdrawals have left investors pondering their next steps. Crypto analyst Skew has observed passive ask liquidity around $100,000, with critical price levels at $105,000. He suggests that significant market players may be strategically positioning themselves for potential price increases as the new year approaches.
Bitcoin’s price recently surged by 4% to reach $98,014, although trading volume has decreased by 24%, indicating reduced market interest. Traders are advised to closely monitor volume and sentiment, especially as significant Bitcoin options expire this Friday, adding another layer of uncertainty to the market dynamics. The shifting focus of investors hints that Bitcoin’s dominance might soon face a test—only time will reveal the market’s next direction.
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