As a seasoned crypto investor with years of rollercoaster rides in this dynamic market under my belt, I find myself standing at a crossroads as I observe the latest developments. The record-breaking outflow from BlackRock Bitcoin ETF (IBIT) and consecutive outflows from US spot Bitcoin ETFs have sent ripples through the crypto community.
On Tuesday, there was a record $188.7 million withdrawal from the iShares Bitcoin ETF by BlackRock, sparking worries about potential future repercussions. Additionally, for the fourth day in a row, U.S.-based spot Bitcoin ETFs have experienced outflows, with Fidelity’s FBTC and Ark Invest’s ARKB continuing to struggle during holidays. Over the past four days, Bitcoin ETFs have recorded a total of more than $1.5 billion in withdrawals.
BlackRock Bitcoin ETF Sees Biggest Outflow Since Launch
In simpler terms, the cryptocurrency market seems to be bouncing back, with Bitcoin, Ethereum, and other digital currencies experiencing an increase over the past day. The price of Bitcoin has rebounded from around $94,000 to nearly $99,000 today, possibly due to a “FOMO Santa Claus rally” where traders fear missing out on further gains. However, Bitcoin is currently trading above $98,000, but a shift in market sentiment could lead to selling pressure.
The primary reasons for the shift in opinion could stem from the BlackRock Bitcoin ETF, as it experienced its single largest outflow since its debut on Tuesday, according to data from Farside Investors on December 25th. Additionally, the iShares Bitcoin ETF (IBIT) saw a significant withdrawal of $188.7 million, nearly double its previous record outflow of $72.7 million which occurred last Friday.
Over the past week, US Bitcoin ETFs collectively disbursed a total of approximately $338.4 million, marking the fourth consecutive week of outflows. Fidelity’s FBTC accounted for $83.2 million, while Ark 21Shares’ ARKB saw $75 million in outflows. The outflows from other cryptocurrency exchange-traded funds were minimal.
The approaching year-end for cryptocurrencies has caused anxiety among traders, as it may create difficulties for them. Although most analysts and investors remain optimistic, the recent forecast by experts such as BitMEX co-founder Arthur Hayes suggesting a possible crypto market crash around Donald Trump’s inauguration day has triggered sell-offs.
On the contrary, businesses dealing with cryptocurrencies, including MicroStrategy, Metaplanet, Matador Technologies, among others, are taking advantage of the decrease in Bitcoin’s price by purchasing more. In fact, Michael Saylor from MicroStrategy has announced a special meeting for shareholders to vote on a proposal for its “21/21 Bitcoin plan” and increase its Bitcoin holdings even further.
What’s Next for Bitcoin Price?
Investors are contemplating their next steps as the BlackRock Bitcoin ETF experiences its biggest-ever redemption, followed by continuous withdrawals from other spot Bitcoin ETFs.
According to crypto analyst Skew, the current level of passive ask liquidity stands at approximately $100,000 based on recent market highs and quotations. This price area is significant. Furthermore, the ask liquidity and spot supply are estimated to be around $105,000. The analyst predicts that market flows and volatility will play a crucial role moving forward.
In this market, someone is tactically buying Bitcoin using the ‘taker’ and ‘limit bid’ strategies. This could be a significant player anticipating rising prices towards the end of the year and into the first quarter of 2022.
In the past day, Bitcoin’s price surged approximately 4%, now standing at around $98,014. Earlier today, the lowest and highest prices were recorded at $93,744 and $99,404, respectively. Additionally, it seems that trading activity has dropped by about 24% over the same period, suggesting a possible reduction in enthusiasm among investors.
Traders should watch for market clues about the direction over the next few days by focusing on volume and sentiment, as well as considering the impact of the potential BlackRock Bitcoin ETF. Importantly, $14.40 billion worth of BTC options with 147 contracts will expire on Deribit this Friday. The price that could cause the most distress to option holders is estimated at $84,000, and the put-call ratio stands at 0.68.
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2024-12-25 11:17