Bitcoin’s steady ascent toward the highly anticipated $100,000 milestone has hit a roadblock, sparking doubts among bullish investors. Despite sustained institutional interest, including MicroStrategy’s ongoing accumulation, the cryptocurrency’s momentum has slowed as capital begins to flow toward other digital assets like Ether and XRP.
“While institutional buying remains strong, we’re seeing a diversification of capital flows across the crypto ecosystem, both from institutional and non-institutional participants,” said Chris Newhouse, director of research at Cumberland Labs.
This diversification has led to record inflows for cryptocurrency exchange-traded funds (ETFs). In November, Bitcoin ETFs saw net inflows of $6.5 billion, while Ether ETFs attracted $1.1 billion, with Ether ETF subscriptions hitting an all-time daily high last Friday, according to Bloomberg data.
Profit-Taking and Market Dynamics
Market analysts point to significant profit-taking by traders who entered Bitcoin at prices between $55,000 and $70,000. “On-chain data show active profit realization from medium-term traders, particularly as Bitcoin trades north of $90,000,” said Vetle Lunde, head of research at K33. This activity has contributed to Bitcoin’s price plateau and muted market leverage, with options and futures open interest remaining subdued following recent liquidations, according to Coinglass data.
Fadi Aboualfa, head of research at Copper Technologies, noted a shift in sentiment as early Bitcoin ETF investors rebalance their portfolios. “After six weeks of positive inflows, we’ve seen a week of sales, and derivative traders are closely monitoring ETF demand as a macro indicator,” he said.
Market Jitters Amid Large Bitcoin Transfers
Adding to investor unease was a blockchain analysis by Arkham, which reported that approximately $2 billion worth of Bitcoin—confiscated from the Silk Road darknet marketplace—was transferred from U.S. government wallets to Coinbase. Such moves often raise concerns about potential large sell-offs, exerting downward pressure on prices.
Bitcoin’s price stood at $95,734 as of 9:33 a.m. Tuesday in Singapore, down slightly from its November 22 peak of $99,728. Options market volatility has also compressed, with Bitcoin at the 64th percentile and Ether remaining elevated at the 81st percentile, according to Jake Ostrovskis, a trader at Wintermute OTC.
Outlook for Bitcoin and Broader Crypto Market
While Bitcoin’s near-term trajectory has cooled, the broader cryptocurrency market remains active. Ether, the second-largest cryptocurrency, and other digital assets are capturing investor interest as traders seek to balance portfolios and hedge against Bitcoin’s slowdown. The market is now watching for further developments, including regulatory signals and liquidity shifts, which could determine whether Bitcoin breaks past its psychological $100,000 barrier.
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