bitcoin is signaling the start of a new bullish trend, rebounding to $42.6K following a recent sell-off driven primarily by short-term holders (STH), who make up the most speculative segment of the bitcoin investor base. Ether also saw a rally, crossing the $2,270 mark alongside the world's largest crypto.
In context, significant capital inflows have been observed into bitcoin and Ether, which could further influence the price trajectories of these major assets.
bitcoin and ethereum attract massive inflows
According to popular on-chain analyst Ali Martinez, December 14 witnessed an influx of over $19.7 billion into bitcoin and ethereum. The figure was reminiscent of the capital influx witnessed exactly three years ago, just before bitcoin rose from $18,000 to $65,000.
If historical patterns repeat, bitcoin could follow a similar trajectory to the 2020 cycle, reaching new highs.
More than $19.7 billion is flowing into bitcoin?src=hash&ref_src=twsrc%5Etfw” data-wpel-link=”external” target=”_blank”>#bitcoin and ethereum?src=hash&ref_src=twsrc%5Etfw” data-wpel-link=”external” target=”_blank”>#ethereum today! This is roughly the same capital inflow we saw in December 2020 earlier. $btc increased from $18,000 to $65,000! pic.twitter.com/pBALVN0C2c
—Ali (@ali_charts) December 14, 2023
Also, greek.live revealed that btc options have had the upper hand amid the fresh mid-week rally, making up 50% of all options volume.
Notably, 50% of block trades actively purchased DEC29 calls. Even though the December 29 expiry IV option is significantly below average, a giant whale chose to go long late in the year in the bull market.
Bullish outlook
Contributing to the recent series of optimistic bitcoin price predictions, another market commentator speculated that the asset is expected to break out of the $42,000 to $45,000 range by the end of next week. After this point, no major obstacles are expected until reaching $63,000.
bitcoin's powerful rally halted after short-term holders dumped their holdings to make profits. This triggered the third sharpest sell-off event of 2023. Glassnode analysis noted that the leading cryptocurrency had hit near-term exhaustion after soaring to a yearly high of $44.5K.
However, the reduction in btc supply on crypto exchanges reflected investor sentiment to hold on to their assets and a lower willingness to sell.
Meanwhile, Arthur Hayes, former CEO of the BitMEX exchange, also reiterated his previous forecast that bitcoin will eventually reach $1 million, attributing it to broader economic changes that are eroding the value of national currencies.
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