Bitcoin Price Drops Below $92,000 as ETFs Experience $420 Million Outflows
Bearish trading in bitcoin (BTC) markets persisted late Monday, with the asset briefly dropping below $92,000 due to profit-taking. It recovered slightly to over $92,800 by Tuesday morning in Asia.
Traders predict this price action may continue until February, after president-elect Donald Trump takes office and implements policies potentially beneficial for the market. Traders at Singapore-based QCP Capital expressed skepticism about significant price movements in January, noting average returns of +3.3% are similar to December's +4.8%. They expect spot prices to remain stable before increasing in February.
Options flows indicate a similar sentiment, with front-end volatility decreasing and risk-reversals favoring March call options. This suggests traders anticipate rising bitcoin prices in March, as they are purchasing more call options than put options, resulting in lower option costs.
BTC is projected to end December down 4%, marking its worst performance since 2021 as retail investors and long-term holders liquidate positions following a 117% annual surge. Additionally, U.S. Chicago PMI readings signal an economic slowdown, applying further pressure on correlated markets.
MicroStrategy, a Bitcoin development company, made its final purchase of the year by acquiring 2,138 BTC for $209 million, bringing its total holdings to 446,400 BTC. However, this news did not prevent losses; BTC prices fell after the announcement, and MicroStrategy shares declined 8% to their lowest point since early November.
The decline affected other cryptocurrencies, with ether (ETH), XRP, Solana’s SOL, and Cardano’s ADA dropping up to 3% before rebounding. BNB Chain’s BNB remained stable, while memecoins dogecoin (DOGE) and shiba inu (SHIB) fell 5%. The CoinDesk 20 (CD20), which tracks major tokens by market capitalization excluding stablecoins, lost 2.7% in the past 24 hours.
Exchange-traded funds (ETFs) holding BTC experienced $420 million in outflows on the second-to-last trading day of the year. Fidelity’s FBTC led with $154 million in outflows, followed by Grayscale’s GBTC at $130 million and BlackRock’s IBIT at $36 million. Since December 19, these products have seen over $1.5 billion in net outflows, indicating a potential shift in investor sentiment towards a more cautious outlook for bitcoin's short-term performance.