Some Bitcoin bulls have begun to be cautious, and an article published on Monday has further heightened the level of tension in the coin industry.
At a time when Bitcoin is struggling to break through the 0.1 million dollar mark recently, some bulls are beginning to express some doubts about it.
Chris Newhouse, head of research at Cumberland Labs, said, “While we are seeing strong institutional buying, particularly entities such as MicroStrategy, continue to accumulate Bitcoin, the broader cryptocurrency ecosystem is experiencing diversification of capital flows from institutional and non-institutional players.”
As the price of Bitcoin stabilizes, interest in other digital assets is rising, such as the second-largest cryptocurrency, Ethereum and XRP, which have lagged behind Bitcoin after President-elect Trump's victory. The former president has become a supporter of cryptocurrencies, raising expectations that the US will adopt more friendly regulation of this often contentious asset class.
According to data compiled by Bloomberg, the monthly net inflows of US Bitcoin and Ethereum spot ETFs both set records in November, at 6.5 billion US dollars and 1.1 billion US dollars, respectively. The daily subscription volume for Ethereum spot ETFs also reached an all-time high last Friday.
Fadi Aboualfa, head of research at Copper Technologies Ltd., said in a message on Monday, “After six consecutive weeks of capital inflows, we have seen a week of sell-off, and derivatives traders are using ETF demand as a measure of the macro direction. Early Bitcoin ETF investors may be keen to rebalance their portfolios as their capital has more than doubled.”
Meanwhile, according to Coinglass data, participants in the crypto options market have begun to increase bearish protection against Bitcoin, while Bitcoin futures have a moderate leverage ratio and remained calm after the digital asset price broke through $0.099 million.
Vetle Lunde, head of research at digital asset research firm K33, quoted data from The Bitcoin Lab as saying, “On-chain data shows that mid-term investors (investors who bought Bitcoin in the 0.055 million to 0.07 million dollar range) are actively making profit settlements, and profit settlement sentiment is particularly strong when the Bitcoin transaction price exceeds $0.09 million.”
According to Lunde, the indicator is an estimate that tracks Bitcoin's on-chain movement when it was last transferred and categorized by price. However, it is rare to see such a significant concentration within a price range, so this indicates that trading is particularly active in the current price range.
During Bitcoin's rise in recent weeks, open positions on Bitcoin options and futures contracts have remained low.
Wintermute OTC trader Jake Ostrovskis said, “Over the past 10 days, the market has suspended trading, and the price of Bitcoin is slightly below 0.1 million dollars. The volatility was slightly reduced to the 64th percentile, while Ethereum's volatility was significantly higher than the 81st percentile.”
On Monday, the tension in the market was heightened by an article published by blockchain analysis firm Arkham, which said that currently around $2 billion worth of bitcoins have been transferred from US government wallets to the CoinBase exchange. These bitcoins are proceeds seized by the US from the dark web “Silk Road.” Prices tend to drop when traders speculate that large amounts of Bitcoin may enter the market at the same time.
