Preface

The bitcoin market experienced a continued bearish trend late Monday, with prices momentarily dipping under $92,000. This came despite a major acquisition by MicroStrategy but saw a recovery to over $92,800 by Tuesday morning in Asia. The market sentiment suggests cautious price action leading into February, subsequent to U.S. President-elect Donald Trump's inauguration and anticipated policy changes that might influence the market. Traders from QCP Capital conveyed low expectations for New Year market spikes mainly due to stable funding conditions.

Lazy bag

Key market insights indicate a potential hold in Bitcoin's rally. Predicted price action stability is anticipated through January, with notable trading activity in March options, implying optimism for increased pricing around that period.

Main Body

Bitcoin (BTC) markets maintain a bearish outlook as traders digest recent transactions and economic indications. Despite MicroStrategy's substantial purchase adding to their growing BTC reserves, prices dipped to just under $92,000 but rebounded slightly by Tuesday's Asian trading hours. Market players project this cautious trading pattern to persist into February, following the U.S. presidential transition. QCP Capital shared sentiments via Telegram, advising against expecting significant market movements during the New Year due to healthy funding conditions. Historical data from January and December support forecasts for flat returns before potential activity increase from February onward. Trading patterns in bitcoin options reflect these sentiments, evidenced by decreased volatility rates and significant interest in March call options, hinting at anticipated price climbs. December sees Bitcoin tongues wagging over a 4% decline—the steepest since 2021—following retail and long-term holder positioning after a substantial yearly rally. The economic backdrop, incorporating U.S. Chicago PMI figures, hints at economic deceleration, adding pressure to a market sensitive to such markers. Meanwhile, MicroStrategy marked its year's end with another notable BTC purchase, although this acquisition seemingly failed to mitigate broader market losses. The ripple effect saw major cryptocurrencies like Ether, XRP, Solana’s SOL, and Cardano’s ADA collectively dropping up to 3% before marginal recoveries. Where BNB maintained stability, memecoins such as Dogecoin and Shiba Inu fell by 5%. The widespread CoinDesk 20 index registered a 2.7% slip over the past day, paralleling these developments. Additionally, ETFs investing in Bitcoin reflected a remarkable $420M outflow on their penultimate trading day for the year. Leading this retreat were Fidelity’s FBTC, losing $154 million, Grayscale’s GBTC with $130 million, and BlackRock’s IBIT at $36 million. Cumulatively, these products observed more than $1.5 billion in outflows since mid-December—halting an earlier surge witnessed in the month's first half with nearly $2 billion in incoming funds, signaling a possible shift towards a cautious or bearish market outlook.

Key Insights Table

Aspect	Description
Market Performance	Bearish trends, with Bitcoin short-term outlook cautious following economic and political developments.
Investor Sentiments	Investors reflecting optimism for March via increased call options.
ETF Outflows	Significant $420M withdrawal preceding New Year trading cut-off.

Last edited at：2024/12/31