Bitcoin Surges 10% as ETFs See $987 Million in Inflows
A return to markets and anticipation of Donald Trump’s inauguration as U.S. president is generating bullish sentiment for bitcoin and the broader crypto market. Bitcoin has increased 10% in the past week, regaining the $102,000 level late Monday and recovering nearly all losses from early December. The asset fell from a peak of nearly $109,000 on December 17 to a low just below $92,000 on December 30, raising concerns of a deeper downturn.
The surge coincides with U.S.-listed spot bitcoin exchange-traded funds (ETFs) attracting $987 million on Monday, their highest since November 21, according to data from SoSoValue. Fidelity’s FBTC led inflows with $370 million, followed by BlackRock’s IBIT with $209 million and Ark Invest’s ARKB with $71 million. Nine of twelve ETFs recorded inflows, marking a significant day for the sector.
Trump’s anticipated crypto policies and economic plans have renewed positive sentiment among traders, contributing to rising BTC prices, typically seen as a precursor to an altcoin rally. Jeff Mei, COO at crypto exchange BTSE, noted that demand for bitcoin is re-emerging after a downbeat Fed outlook in late December halted a potential Santa Claus rally. As traders return from vacation, purchases of bitcoin and other assets have resumed in a bullish trend ahead of Trump’s inauguration.
Some traders are targeting the $109,000 level short-term before confirming a bullish trend, potentially leading to higher prices. Alex Kuptsikevich, FxPro chief market analyst, indicated that the technical picture suggests a classic correction completion, with growth resuming from the Fibonacci retracement level of 61.8%. A breach of historical highs around $109,000 would confirm this scenario, with expectations for accelerated growth after surpassing the $100,000 mark.
Fibonacci levels serve as a technical analysis tool to identify potential support and resistance points where price movements may pause or reverse. Many traders believe tracking these levels can predict key price actions, possibly creating self-fulfilling prophecies in the market.
Market volatility is expected to remain low until the U.S. Nonfarm payrolls (NFP) report on Friday, which could initiate the new trading year with decision-makers fully engaged, according to Augustine Fan, head of insights at SOFA. Strong NFP data might strengthen the U.S. dollar and raise interest rates, negatively impacting risk assets like stocks and bitcoin. However, Fan noted that the Federal Open Market Committee (FOMC) meeting at the end of the month is anticipated to be the highest volatility event for January, as economic indicators suggest signs of a 'soft landing.'
As of Tuesday morning in Asia, BTC trades just above $101,600, up 2% in the past 24 hours. The broad-based CoinDesk 20 (CD20), an index tracking the largest tokens by market cap, is up 0.53%.