Bitcoin (BTC), after experiencing a bearish trend over the past four days, has seen a noticeable deceleration in its initial bullish momentum that was aimed at reaching the much-anticipated $100k mark. The cryptocurrency has consistently struggled to close above the previously significant support level of $95k, indicating a potential shift in market sentiment. This shift is further emphasized by the altcoin sector, which is gradually gaining traction and bullish momentum, suggesting a potential redistribution of investor focus.
Bitcoin Dominance and Altcoin Momentum
In a closer examination of the daily time frame, Bitcoin’s dominance has been characterized by the formation of higher highs. However, the Relative Strength Index (RSI) is showing a bearish divergence. This divergence implies that while Bitcoin’s market share appears to be rising, underlying strength is waning, paving the way for altcoins to capture more attention from investors. Consequently, this scenario is fueling the ongoing rotation of funds within the cryptocurrency market.
Spot Bitcoin ETFs See Continued Outflows
Since Bitcoin’s price touched $99.5k last week, investor sentiment has shifted from extreme greed—recorded at 93 percent—to a more tempered greed level of about 75 percent at the time of writing. Over the past two days, U.S. spot Bitcoin ETFs have recorded significant net cash outflows, totaling over $550 million. On Tuesday alone, these ETFs saw a net cash outflow of approximately $122 million. Notably, BlackRock’s IBIT reported a neutral net cash flow, while Fidelity’s FBTC and Grayscale’s GBTC experienced substantial outflows of $95 million and $36 million, respectively. Conversely, Bitwise BITB and Grayscale’s BTC were the exceptions, reporting positive cash inflows of about $6.47 million and $4.84 million, respectively.
Future Prospects for Bitcoin
Bitcoin’s price trajectory mirrors patterns observed at the end of the previous year. After breaking free from a consolidation range, Bitcoin rallied, only to settle into a new consolidation below resistance levels while maintaining higher lows. This pattern suggests potential for an upward movement in the near future. The macro bull rally in Bitcoin was confirmed following the U.S. 2024 elections, yet the momentum appears to be gradually shifting towards the altcoin market, with Ethereum (ETH) taking the lead.
From a technical perspective, Bitcoin’s price might revisit the support level near $85k if the current trading range above $91k does not hold. Veteran trader Peter Brandt envisions a scenario where Bitcoin could surge to $130k before encountering a significant correction, similar to what has been observed in previous bull cycles.
