The return to the markets following the holiday season has sparked significant bullish sentiment for Bitcoin and the broader cryptocurrency market, coinciding with the anticipation surrounding Donald Trump’s inauguration as the U.S. president. In the past week alone, Bitcoin has experienced a notable rise of 10%, reclaiming the $102,000 mark late on Monday while nearly erasing its losses from early December.
Bitcoin’s price behavior has been volatile, slipping from a peak of nearly $109,000 on December 17 to a local low of just under $92,000 by December 30. This decline triggered concerns among investors about a possible prolonged downturn. However, the market has responded positively, indicating a resilient demand for Bitcoin.
The surge in Bitcoin’s value is notably supported by U.S.-listed spot Bitcoin exchange-traded funds (ETFs), which attracted an impressive $987 million on Monday—the highest inflow since November 21, according to data gathered by SoSoValue. Fidelity’s FBTC ETF led the charge with inflows of $370 million, followed closely by BlackRock’s IBIT at $209 million and Ark Invest’s ARKB with $71 million. This uptick in inflows, with nine out of twelve ETFs recording positive movement, marks a standout day for the sector.
Trump’s anticipated crypto policies, alongside broader economic initiatives, have rekindled positive sentiment among traders. This renewed influx of optimism has resulted in a rising price for Bitcoin, often serving as a precursor to an altcoin rally. Jeff Mei, COO at crypto exchange BTSE, remarked on the resurgence of Bitcoin purchases as traders wrap up their holidays: “We believe that the demand for Bitcoin is manifesting itself after a downbeat Fed outlook in late December put the brakes on a Santa Claus rally.”
Market analysts suggest that many traders are eyeing the $109,000 level in the short term. Alex Kuptsikevich, chief market analyst at FxPro, explained, “So far, the technical picture looks like a classic correction completion with a resumption of growth from the Fibonacci retracement level of 61.8% of the rally since the beginning of November. This scenario will be confirmed if the historical highs of around $109,000 are confidently breached.”
Fibonacci levels serve as a technical analysis tool, helping traders identify potential support and resistance where price movements might exhibit volatility. Tracking these levels can provide insights into future price behaviors, potentially triggering trend-based reactions in the market.
In anticipation of potential market movements, volatility is likely to remain subdued until the release of the U.S. Nonfarm Payrolls (NFP) report on Friday, a crucial indicator that some believe will kick-start the new trading year with decision-makers fully engaged. Strong NFP data could bolster the U.S. dollar—possibly leading to increased interest rates that might adversely impact risk-sensitive assets like stocks and Bitcoin.
As of Tuesday morning in Asia, Bitcoin is trading just above $101,600, reflecting a 2% increase in the past 24 hours. Meanwhile, the broad-based CoinDesk 20 (CD20)—an index tracking the largest tokens by market cap—has also risen by 0.53%, indicating a healthy momentum in the broader crypto ecosystem.
