Bearish trading in bitcoin (BTC) markets continued late Monday as the asset fell below $92,000 on profit-taking despite another massive buy by MicroStrategy, recovering to just over $92,800 last week. morning time in Asia on Tuesday.
Some traders expect the current price action is likely to continue into February, weeks after US president-elect Donald Trump takes office and implements a series of policies that could help the market.
“We are skeptical of any New Year fireworks especially with funding being healthy,” traders at Singapore-based QCP Capital said in a Telegram broadcast. “January’s average return (+3.3%) is quite similar to December’s (+4.8%), and we can expect the area to remain in this range for the near term before things start to pick up from February to next .”
“Option flows also reflect similar sentiments that frontend vols are declining and risk-reversals are mostly bids for March Calls, partly due to significant March (120k-130k) which were Calls bought on Friday,” they added. This means that traders are betting on a rise in the price of bitcoin in March. They buy more call options (which are profitable if the stock goes up) than put options. These options are declining in value, showing optimism for the March period.
BTC is on track to end December down 4%, its worst since 2021, as both retail investors and long-term holders cash out positions after a 117% annual gain . Elsewhere, US Chicago PMI readings signaled a slowdown in the economy, adding to market pressure that tends to be associated with such data.
In what appears to be its last purchase of the year, Bitcoin development company MicroStrategy increased its BTC hoard for the eighth consecutive week on Monday, adding another 2,138 BTC for $209 million in the week ended December 29. That brought its total holdings to 446,400 BTC.
But news of the purchase did little to stem the losses. BTC prices fell in the hours following MicroStrategy’s announcement, while the company’s shares fell 8% to their lowest since early November.
The fall spread across the majors, with ether (ETH), XRP, Solana’s SOL and Cardano’s ADA falling as much as 3% before recovering. BNB’s BNB Chain was little changed, while memecoins dogecoin (DOGE) and shiba inu (SHIB) fell 5%.
The broad-based CoinDesk 20 (CD20), an index that tracks the largest tokens by market capitalization, minus stablecoins, has lost 2.7% in the past 24 hours.
Exchange-traded funds (ETFs) that hold the asset recorded $420 million in outflows in their second-last trading day before the new year, shows the data. Fidelity’s FBTC lost $154 million to lead the outflows, followed by Grayscale’s GBTC at $130 million and BlackRock’s IBIT at $36 million.
Commodities recorded more than $1.5 billion in net outflows since Dec. 19, halting an impressive run in the first half of the month that saw nearly $2 billion in net inflows. Large inflows could reflect a shift in investor sentiment, possibly toward a more cautious or bearish view of bitcoin’s short-term performance.
