Bitcoin Faces Increased Downside Protection as $100,000 Goal Approaches
Bitcoin (BTC) is currently trading 3.8% below its record high of $99,540, raising concerns about the sustainability of its growth and potential corrections as the year ends.
Investors Flock To Ethereum And XRP
Chris Newhouse, director of research at Cumberland Labs, noted strong institutional buying pressure, especially from companies like MicroStrategy accumulating Bitcoin. However, there is a shift in capital flows towards other digital assets such as Ethereum (ETH) and XRP, indicating diversification in investor interest.
The election of President-elect Donald Trump, a crypto advocate, has increased expectations for favorable US regulations. This optimism contributed to a 400% increase in the price of XRP over the past month. Additionally, record monthly net inflows into Bitcoin and Ethereum exchange-traded funds (ETFs) were reported, with $6.5 billion for Bitcoin and $1.1 billion for Ethereum in November, marking an all-time high for daily Ether ETF subscriptions.
$2 Billion Silk Road Bitcoin Moved To Coinbase
The options market indicates a rise in downside protection for Bitcoin at later expiries this month. BTC futures have shown moderate leverage after surpassing the $99,000 mark. On-chain data suggests traders who bought BTC in the $55,000 to $70,000 range are now realizing profits, particularly as BTC trades above $90,000.
Trader Jake Ostrovskis observed a pause in the market as Bitcoin remains just under $100,000, with volatility levels compressing slightly. This cautious sentiment may lead to retesting of lower support levels in BTC's price action, potentially jeopardizing the $100,000 milestone by year-end.
Recent developments include a report that nearly $2 billion worth of BTC, previously confiscated from the Silk Road marketplace, was moved from US government wallets to Coinbase. Such movements often lead to speculation among traders; similar actions by the US government contributed to significant downtrends earlier this year.
As of now, BTC is trading at $94,480, down 0.5% in the last 24 hours.
Featured image from DALL-E, chart from TradingView.com