Bitcoin’s Recent Rally and Market Dynamics
Bitcoin (BTC) witnessed a notable upward movement, climbing over 5% on Wednesday. This surge followed a rebound from the crucial support range between $94,300 and $96,600 earlier in the week. The leading cryptocurrency revisited its previous all-time high (ATH) range of $101,219 to $101,998 before experiencing a slight pullback, trading at approximately $100,780 on Thursday, December 12, during the mid-London session.
Additionally, the Bitcoin Futures Open Interest (OI) increased by 6%, reaching around $62.8 billion at the time of this report. In the backdrop of significant daily liquidations in the leveraged market, Bitcoin’s funding rate has seen a marked decline, falling below the recent norm.
Bitcoin Whales Accumulate Relentlessly
The availability of Bitcoin on centralized exchanges has dramatically reduced over the past year, driven by heightened demand from institutional investors. Over the last 30 days, Bitcoin’s supply on centralized exchanges decreased by approximately 120,000, settling around 2.23 million at the time of writing.
Market data from Cryptoquant indicates that Bitcoin has been attracting approximately $80 billion monthly from long-term investors over the past year. This substantial capital inflow has significantly surpassed the funds movement observed in the last 15 years. Notably, whale investors have been steadily accumulating Bitcoin, anticipating the United States’ potential approval of a strategic BTC reserve.
The recent market data reveals that US spot Bitcoin ETFs recorded a net cash inflow of about $223 million on Wednesday, elevating the cumulative total net inflow to approximately $34.58 billion.
What Lies Ahead for Bitcoin?
From a technical perspective, Bitcoin’s price trajectory is forming a distinct signal, diverging from the present fundamentals. On the daily chart, Bitcoin’s price against the US dollar has developed a potential double top, accompanied by bearish divergence on the daily Relative Strength Index (RSI). This pattern indicates a possible mid-term correction.
If Bitcoin consistently closes above $102,000 in the forthcoming weeks, the price could aim for $120,000, aligning with the 0.618 daily Fibonacci extension. Conversely, Bitcoin might retrace towards the support level above $85,000 in the upcoming weeks before resuming its bullish rally early next year.
FAQs
Bitcoin ETFs attract institutional investments, enhancing demand and reducing supply, which often results in driving BTC prices higher.
Bitcoin may target $120,000 if it breaches the $102,000 resistance. Alternatively, it could retrace to the $85,000 support before recommencing its bullish trend in 2024.
