The price of Bitcoin surged to a new peak above $108,000 on the 18th of December, driven by significant whale activity. This positive momentum suggested a potential rise to $110,000 by the end of the week. As the leading cryptocurrency continued to break new ground, large holders increased their Bitcoin holdings from 619.43 BTC to 3,620 BTC within a few days.
Despite this surge in demand, a sudden drop occurred, bringing Bitcoin’s value down to around $101,000. The market’s reaction to Fed Chair Jerome Powell’s statement regarding the Federal Reserve’s stance on Bitcoin may have contributed to this pullback. Outflow levels from ETFs such as Grayscale and Ark Invest also indicated a shift in sentiment.
Is a Bearish Trend Emerging for Bitcoin?
Recent data on Bitcoin’s spot market flows showed a significant increase in net outflows, reaching $824.78 million on Wednesday. This trend, coupled with lower funding rates and decreased activity in derivatives trading, suggests a more cautious approach from market participants.
It is evident that institutional investors and whales have been major drivers behind Bitcoin’s recent rally, with retail investors appearing less confident in the face of new price highs. The subdued funding rates and lower volatility could potentially indicate a smoother bullish trend for Bitcoin, provided that institutional support remains strong.
While the market continues to navigate through these developments, monitoring ETF outflows and spot demand will be crucial in gauging Bitcoin’s resilience in the face of short-term fluctuations.