Bitcoin (BTC) markets showed continued bearishness late Monday, with prices briefly dipping below $92,000 before recovering to $92,800 as of Tuesday morning in Asia. Despite a year-end bitcoin purchase by MicroStrategy and the broader market’s anticipation for policy shifts under U.S. President-elect Donald Trump, traders and analysts forecast subdued activity heading into 2025.
Modest Outlook for January
Traders at Singapore-based QCP Capital noted in a Telegram broadcast that they were “skeptical of any New Year fireworks” as funding rates remain stable. They highlighted January’s historical average returns of +3.3%, similar to December’s +4.8%, suggesting price action might remain range-bound until February.
“Options flows are also reflecting similar sentiments with frontend vols drifting lower and risk-reversals most bid for Calls in March,” they said, referring to increased purchases of call options betting on a price rally in March.
ETF Outflows Reflect Caution
Exchange-traded funds (ETFs) holding bitcoin experienced significant outflows, with $420 million withdrawn on December 30 alone. Fidelity’s FBTC led the decline with $154 million in outflows, followed by Grayscale’s GBTC ($130 million) and BlackRock’s IBIT ($36 million).
ETFs have recorded more than $1.5 billion in net outflows since December 19, marking a sharp reversal from the nearly $2 billion inflows seen earlier in the month. Analysts interpret this trend as a potential shift toward a more cautious or bearish outlook on bitcoin’s short-term performance.
BTC’s December Struggles
Bitcoin is set to close December with a 4% monthly loss, its worst performance since 2021. This decline comes after a 117% annual surge, as retail investors and long-term holders took profits. The slump in bitcoin prices also impacted major altcoins, with ether (ETH), XRP, Solana’s SOL, and Cardano’s ADA declining by up to 3% before a slight recovery.
MicroStrategy Purchase Fails to Boost Sentiment
MicroStrategy, a prominent bitcoin development company, announced its eighth consecutive week of BTC purchases on December 29, adding 2,138 BTC for $209 million. This brought its total holdings to 446,400 BTC.
However, the announcement failed to lift market sentiment. BTC prices dropped further after the news, and shares of MicroStrategy declined by 8%, hitting their lowest level since November.
Broader Market Pressures
Economic concerns, including a slowdown reflected in U.S. Chicago PMI data, added to market pressures as traders reassess risks heading into the new year.
With BTC prices struggling to maintain momentum, traders are eyeing February for a potential revival, driven by anticipated policy changes under the new U.S. administration and improving market conditions. However, the near-term outlook remains cautious as investors weigh macroeconomic uncertainties and year-end profit-taking.
