The most famous cryptocurrency regains momentum after the flow of capital through ETFs and a weakening of the dollar
In a positive turn for cryptocurrency enthusiasts, the price of bitcoin (BTC) shows a remarkable recovery, resting on the EMA50 and generating a solid bullish sentiment in the medium term. The main cryptocurrency in the world received a strong inflow of capital through exchange-traded funds (ETFs). A positive net flow stands out, reaching 907.3 million dollars on January 3, according to data from Coinglass.
The price of Bitcoin remains above the EMA50 and EMA200, suggesting a maintenance of the bullish trend in the medium and long term. / TradingView
Impact of the dollar and the decisions of the FED
The fall of the dollar on its DXY index to 108.92 points last Friday, after statements by a Federal Reserve (FED) official who indicated that such a restrictive approach is not necessary. This favored the recent rise in the price of bitcoin. However, the yield on two-year Treasury bonds rose to 4.28% on January 3. The same day, which reports on a rising interest rate backdrop. These expectations are reflected in the money market, where 89.3% of participants anticipate the interest rate to remain at 4.50% by the end of January.
Market reaction and long-term buying
Bitcoin had seen a significant drop from its high of $106,000 on December 18, plummeting to $91,500. However, it managed to bounce back to reach $98,000 again, thanks to massive buying by long-term investors and "whales." Data from INTOTHEBLOCK shows that "cruiser" investors increased their BTC balances to 5.15 million, compared to 4.61 million on December 10. In contrast, short-term traders liquidated positions, reducing their holdings to 2.45 million BTC from 2.84 million.
Futures and Options Market: Trends and Challenges
In the futures market, open interest decreased to 56.12 billion, marking a 1.32% drop in the last 24 hours. This trend indicates a reduction in bitcoin liquidity through these instruments. In addition, a capital outflow of $34.65 million is recorded in the spot market. Although this amount is relatively small compared to the movement recorded in the ETF market.
The BTC options market shows a bullish inclination, with 66.45% of "call" positions. However, open interest decreased to 26.67 billion from a high of 43.78 billion on December 26, suggesting a possible consolidation in the market as investors wait for new catalysts.
Future Outlook
The price of Bitcoin remains above the EMA50 and EMA200, suggesting a maintenance of the bullish trend in the medium and long term. The challenge now will be to overcome the $100,000 barrier, which could trigger a new wave of buying. Firm support was established at $91,000; if this level is broken, BTC could fall to quotes as low as $78,000.
This week, investors will be keeping an eye on the US Services PMI reports, the JOLTS job openings survey, and other key indicators that will influence the FED's interest rate decisions.
As Bitcoin is at a crossroads, the next moves in the market could be crucial in defining its short- and long-term behavior. The rise in bullish sentiment could intensify if jobs data is presented that supports continued growth, or it could face further corrections if key support levels are lost.
At the time of this writing, Bitcoin is trading at $98,134.87.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in cryptocurrencies involves risks; it is recommended to consult a specialist before making transactions.
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