Bitcoin Dips 5% to $100K After Record High While BlackRock ETF Draws $740M

On December 18, 2024, Bitcoin’s price was recorded at $100,071, reflecting a decline of more than 5% compared to the previous day. This drop came in the wake of a recently established all-time high of $108,366.

The overall market capitalization of Bitcoin reached $2.09 trillion, accompanied by a trading volume of $70 billion in the last 24 hours. Maintaining a strong position, Bitcoin claimed a 56.63% share of the entire cryptocurrency market.

The activity surrounding ETFs highlighted an interesting aspect of investor behavior. The BlackRock iShares Bitcoin Trust experienced significant inflows of $740 million. In contrast, other ETFs, such as Fidelity’s FBTC, Grayscale’s GBTC, and Bitwise’s BITB, saw outflows.

Ultimately, there was a net increase of $493 million in inflows, largely fueled by the popularity of BlackRock’s product. Bitcoin's technical analysis indicated a robust upward trend, with its price remaining above crucial moving averages.

However, certain indicators pointed toward a possible market reversal. The Murrey Math Lines indicated an overshoot, while momentum indicators revealed patterns of bearish divergence.

Investor sentiment appeared to lean towards extreme greed. The Fear and Greed Index surged to 80, suggesting the market might be overheating. Such high readings often raise caution among investors, as historical trends indicate corrections often follow periods of intense optimism.

Additionally, macroeconomic factors played a significant role in shaping the crypto market's landscape. In particular, the Federal Reserve’s decision to cut interest rates to a range of 4.25%-4.5% was pivotal.

On-chain metrics illustrated a trend of Bitcoin holders opting to keep their investments. With Bitcoin balances on exchanges nearing multi-year lows, it appears that most holders are not looking to sell in the short term. This trend could signal a bullish long-term perspective for Bitcoin.

Bitcoin, ETF, Market