Bitcoin at the $84,000 level... Santa rally grows distant

YM Lee

Summary

Reports that Bitcoin's price fell to the $84,000 range due to institutional investors' net outflows from spot exchange-traded funds (ETFs) and slowing liquidity.
Experts said that the slowing growth in Tether's market capitalization and the decline in active Bitcoin wallet counts are signals of reduced additional market liquidity.
They warned that if Bitcoin fails to hold the short-term support at $84,000, it could fall further to $73,777, and that the absorption of investor-held positions would need to occur before a shift to an upward trend is possible.

Crypto Now

ETF net outflows alone reach $630 million

Bitcoin's price has struggled to rebound amid strong selling pressure. With institutional investor funds withdrawing and signs of slowing liquidity emerging, some expect it will be difficult for the uptrend to resume by year-end.

On the 21st, Cointelegraph reported that Bitcoin's price briefly fell into the $84,000 range on the 19th. It was largely attributed to institutional selling, with spot Bitcoin exchange-traded funds (ETFs) seeing net outflows of $634.8 million that day. Other cryptocurrencies have shown similar trends. Ethereum is trading below $3,000, and XRP and Solana are also remaining weak.

Experts say that, alongside investor selling, a decline in overall market liquidity is weighing on the market. Xwin Research Japan analyzed, "Tether's 60-day market-cap increase has sharply fallen from $15.38 billion last month to $4.83 billion recently, indicating a slowdown in new capital inflows," adding, "the number of active Bitcoin wallets falling to its lowest level in a year also suggests reduced liquidity."

Some in the crypto industry say that if Bitcoin falls below $84,000, the decline could deepen. Crypto analyst MorenoDV said, "Technically, $84,000 is a short-term support level," adding, "if it falls below this, Bitcoin's price could correct to $73,777." Many expect that until it is confirmed whether this short-term support holds, Bitcoin's price will not show a clear direction.

Even if Bitcoin's price rebounds, it's expected that some of the holdings bought at the highs need to be absorbed before the trend can turn upward. Crypto-asset analytics platform Glassnode said in a report on the 17th, "Buying was concentrated when Bitcoin's price was between $93,000 and $120,000," and "if it does not regain the short-term investors' average purchase price of $101,500, it will be difficult for upward momentum to strengthen." It added, "spot demand is selective and open interest (OI) in the futures market is also decreasing, indicating a growing risk-aversion trend."

Young-min Lee, Bloomingbit reporter 20min@bloomingbit.io

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