Some traders say that a broad bullish trend may emerge as the technical adjustment is about to be completed.
Author: Shaurya Malwa
Source:Coindesk
Compiled by: Ada, MetaEra
The return of the market after the holidays and the anticipation of Donald Trump's inauguration as President of the United States have created a bullish sentiment for Bitcoin and the broader Altcoin market.
Over the past week, Bitcoin has risen 10%, reclaiming $102,000 on Monday evening, reversing almost all of its losses since early December. The asset fell from a near $109,000 high on December 17 to a local low just below $92,000 on December 30, which had raised concerns about further declines.
Data from SoSoValue shows that on Monday, Bitcoin Spot ETFs listed in the US attracted $987 million in inflows, the highest level since November 21.
Fidelity's FBTC led the inflows with $370 million, followed by BlackRock's IBIT with $209 million and Ark Invest's ARKB with $71 million. 9 out of 12 ETFs saw net inflows, with none experiencing outflows, making it the best performing day for this ETF category.
Traders' optimism has been restored by Trump's promised crypto policies and broader economic plans - this is often a precursor to Altcoin rallies, and has also pushed up the price of BTC.
Jeff Mei, Chief Operating Officer of crypto exchange BTSE, told CoinDesk in a Telegram message on Tuesday: "We believe that the demand for Bitcoin is emerging as the market has been suppressed by the pessimistic expectations of the Federal Reserve in late December, after the post-Christmas rally."
Mei added: "Now that traders have returned from their holidays and are back at their desks, with Trump's inauguration ceremony approaching, they have regained confidence in Bitcoin, Altcoins and related stocks, and the market is showing a bullish trend."
Before the bullish trend is confirmed, some traders have set a short-term target of $109,000 for Bitcoin, laying the foundation for further price appreciation.
Alex Kuptsikevich, Chief Market Analyst at FxPro, said in an email: "So far, the technical chart looks like a typical retracement has been completed, recovering the 61.8% Fibonacci level from the November highs. If the breakout above the historical high around $109,000 is confirmed, this will be validated. At the same time, we expect Bitcoin's growth to accelerate after breaking above the $100,000 mark."
Fibonacci levels are a technical analysis tool used to identify potential support and resistance levels where price movements may retrace or extend. Some traders believe that tracking Fibonacci levels can improve predictive value in determining key price levels - this could become a self-fulfilling prophecy.
Therefore, traders expect market volatility to remain low until the US Non-Farm Payrolls (NFP) data is released on Friday, with some believing the report will usher in a new trading year, as SOFA Insights manager Augustine Fan stated, "decision-makers will be fully back at work".
Strong NFP data could push up the US Dollar, potentially leading to rising interest rates, which could negatively impact risk assets like stocks and BTC.
"However, the event that has caused the highest volatility in Bitcoin prices this month has been identified as the end-of-month FOMC meeting, as economic data has already been priced in to suggest a 'soft landing' is imminent," Fan added.
In early Asian trading on Tuesday, the price of BTC was slightly above $101,600, up 2% in the past 24 hours. The CoinDesk 20 (CD20) index, which tracks the largest tokens by liquidity, rose 0.53%.
