The bulls may need to wait a little longer for bitcoin’s next big breakout, if recent analyst predictions and market data are any indication. The largest cryptocurrency briefly dipped below $92,000 in Monday trading as profit-taking continued to cap gains following a blistering 117% rally in 2024. With BTC on track for its worst monthly performance in three years, analysts say the sideways action could persist until well after the new year.
Range-Bound Bitcoin
Bitcoin’s December slump has left many investors wondering – is this just a healthy pullback, or the start of a deeper correction? According to Singapore-based trading firm QCP Capital, BTC is likely to remain range-bound in the near-term.
We are skeptical of any New Year fireworks especially with funding healthy. January’s average returns are relatively similar to December’s, and we could expect spot to remain in this range before things start to pick from Feb onwards.
– QCP Capital
The lackluster price action comes despite another massive bitcoin purchase by MicroStrategy on Monday. The software firm bought 2,138 BTC for $209 million last week, bringing its total holdings to a whopping 446,400 BTC. But not even that was enough to stop the bleeding, as BTC dipped to $92,000 and MicroStrategy shares hit two-month lows following the announcement.
Profit-Taking Pressures
After such a stellar year, some investors are clearly cashing out gains and trimming positions before the calendar flips. Outflows from bitcoin ETFs totaled a hefty $420 million on Monday alone, led by $154 million from Fidelity’s FBTC product.
- Fidelity’s FBTC: $154 million outflow
- Grayscale’s GBTC: $130 million outflow
- BlackRock’s IBIT: $36 million outflow
The major BTC funds have now seen over $1.5 billion fly out the door since December 19th, a sharp reversal from the nearly $2 billion of inflows notched earlier in the month. Such strong outflows often reflect a shift toward bearish sentiment.
Economic Warning Signs
Compounding the worries are early signals of a potential economic slowdown. Recent readings from the U.S. Chicago Purchasing Managers’ Index indicate that business activity is starting to contract in the region. Given bitcoin’s tendency to trade in line with traditional risk assets, any further economic deterioration could spell trouble for BTC.
Of course, bitcoin has proven the doubters wrong many times before. And there are still plenty of bulls calling for a run at $100,000 in early 2025 as attention shifts to new policy initiatives under a Trump administration. But for now, caution seems to be the prevailing mood.
Waiting on Washington
Much may depend on the early moves of president-elect Trump and the new Congress. Expectations are high that the crypto-friendly politician could unleash a wave of favorable policies once in office. But the specifics remain hazy for now, giving investors little to trade on in the near-term.
We could expect spot to remain in this range in the near-term before things start to pick from Feb onwards.
– QCP Capital
In the meantime, bitcoin appears content to consolidate within its established $90,000-$94,000 range. Barring any major news catalyst, it may take until February – when the new U.S. political leadership is in place – for BTC to mount a decisive move in either direction.
But make no mistake – when the next big surge finally comes, the MicroStrategys of the world will be waiting to pounce. The company’s aggressive bitcoin accumulation strategy shows no signs of letting up, price pullbacks be damned. For long-term BTC believers, that steadfast conviction offers a reassuring constant amid the market’s daily gyrations.
