Chris Newhouse, head of research at Cumberland Labs, said, "While we see strong institutional buying, particularly with entities like MicroStrategy continuing to accumulate Bitcoin, the broader cryptocurrency ecosystem is experiencing a diversification of capital flows from both institutional and non-institutional participants."
As Bitcoin prices stabilize, interest in other digital assets is rising, such as the second-largest cryptocurrency Ethereum and XRP, which had previously lagged behind Bitcoin after former President Trump's election win. The former president has become a supporter of cryptocurrencies, raising expectations for a more friendly regulatory approach from the U.S. towards this often controversial asset class.
According to data compiled by Bloomberg, the monthly net inflows for U.S. Bitcoin and Ethereum spot ETFs set records in November, with $6.5 billion and $1.1 billion, respectively. Last Friday, the daily subscription volume for the Ethereum spot ETF also reached a historic peak.
Fadi Aboualfa, head of research at Copper Technologies Ltd., stated in a message on Monday, "After six consecutive weeks of inflows, we are seeing a week of sell-offs, with derivatives traders using ETF demand as a gauge for macro direction. Early Bitcoin ETF investors may be eager to rebalance their portfolios as their funds have more than doubled."
Meanwhile, according to Coinglass data, participants in the cryptocurrency options market are beginning to increase their bearish protection on Bitcoin, while the leverage of Bitcoin futures remains moderate, remaining calm after the price of this digital asset broke $99,000.
Vetle Lunde, head of research at digital asset research firm K33, cited data from The Bitcoin Lab, stating, "On-chain data indicates that medium-term investors (those who bought Bitcoin in the $55,000 to $70,000 range) are actively taking profits, and the profit-taking sentiment is particularly strong when Bitcoin's trading price exceeds $90,000."
Lunde stated that this metric is an estimate that tracks the on-chain movements of Bitcoin during its last transfer and categorizes them by price. However, seeing such a significant concentration within a price range is rare, indicating that trading is particularly active under the current price range.
During the recent surge in Bitcoin over the past few weeks, the open interest in Bitcoin options and futures contracts has remained low.
Jake Ostrovskis, an over-the-counter trader at Wintermute, stated, "In the past 10 days, the market has paused trading, with Bitcoin prices slightly below $100,000. Volatility has slightly compressed to the 64th percentile, while Ethereum's volatility is significantly above the 81st percentile."
On Monday, an article released by blockchain analytics firm Arkham heightened market tensions, stating that approximately $2 billion worth of Bitcoin had been transferred from U.S. government wallets to the Coinbase exchange, which was seized from the dark web 'Silk Road.' Prices often drop when traders speculate that a significant amount of Bitcoin may enter the market simultaneously.
