Bitcoin price is eyeing a breakout from the consolidation pattern as buyers regain control. At the same time, more than $780 million in net outflows were confirmed from Spot BTC exchange traded funds.
summary
- Bitcoin price recovered to the $90,000 level on Monday.
- Rekindled tensions between Russia and Ukraine and rising BTC price expectations accelerated the rebound.
- A bullish symmetrical triangle pattern was forming on the 4-hour chart.
Bitcoin (BTC) price fell from the $90,000 level on December 22nd, then fell to $86,740 by Christmas Eve, according to data from crypto.news. The bulls tried to regain the $90,000 level, but it fell back below $89,000 on Friday and ended the weekend trading within the $87,000-$88,000 zone.
Bitcoin prices fell last week as outflows from spot ETF funds continued, a reversal from the strong inflows seen through most of the second and third quarters of this year that supported Bitcoin’s rise to an all-time high of $126,080 in October.
According to SoSoValue data, 12 spot BTC ETFs recorded net outflows of $782 million from Dec. 22 to Dec. 26, continuing an outflow trend that saw $1.08 billion outflows from investment products so far in December and $3.48 billion in the previous month.
These outflows indicate that institutional investors’ long-term confidence remains weak and that investor sentiment is likely to remain subdued.
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Additionally, recent comments from the Fed chair and key officials indicating a more cautious stance on rate cuts have kept Bitcoin prices subdued as expectations for Fed rate cuts in January and next month fade.
At the time of writing, the odds of 25 basis points were 13% and the odds of no change were 87%, according to Polymarket data.
On Monday, December 25th, BTC was able to briefly climb above $90,000 and recover to just over $90,200, but settled at $89,830 at the time of writing.
Bitcoin’s rally today appears to be driven by renewed geopolitical tensions between Russia and Ukraine on Sunday, which pushed up oil prices and subsequently prompted traders to move money into safe-haven assets such as Bitcoin, which is often seen as a digital hedge against uncertainty.
The rise in BTC prices was also supported by increased demand from derivatives traders. In particular, short-term retail traders appear to be driving much of the recent activity.
Bitcoin weighted funding rates have risen to one of the highest levels since October, according to data from CoinGlass, a clear sign that more investors are betting on further increases in the price of Bitcoin, at least in the short term.
Open interest in Bitcoin futures has also increased by 7% in the past 24 hours, a sign that more participants will enter the market, which could have the effect of pushing prices higher.
On the 4-hour chart, Bitcoin’s price trend has formed a symmetrical triangle since mid-November of this year. Although it tends to be a neutral formation, a breakout of the upper trend line usually acts as a bullish trigger for a sustained upside move.
Bitcoin price formed a symmetrical triangular pattern on the 4-hour chart — December 29 | Source: crypto.news
At the time of writing, it appears that the bulls have a technical advantage over the market. The Arun uptrend has reached 100% compared to the Arun downtrend of 7.14%, which represents a stark contrast and indicates that buyer demand is much stronger than selling pressure.
Moreover, the MACD line is also trending upward above the zero line, further confirming the trend reversal towards bullish momentum.
Therefore, traders will keep a close eye on the $90,975 level, which coincides with the 38.2% Fibonacci retracement level. A decisive break above the level with strong volume could confirm a breakout of the pattern and subsequently push the price to $94,200. The bulls managed to reach this level earlier this month and could see a pullback thereafter.
Although momentum favors upside, a close below the $87,000 support zone could invalidate the immediate bullish thesis and allow Bitcoin to retreat towards the psychological level of $85,000.
read more: Ethereum price forms risk pattern due to slump in network fees and ETF inflows
Disclosure: This article does not represent investment advice. The content and materials published on this page are for educational purposes only.
