Bitcoin Consolidates Near $100K – Will We See a Christmas Rally? Cryptoasset Weekly Update (December 14, 2024)

BTC/USD & ETH/USD Key Points

• Bitcoin saw another liquidation selloff Monday before recovering back toward record highs as we go to press.
• Microsoft shareholders rejected a bitcoin reserve proposal that would have seen the tech behemoth add BTC to its treasury assets
• Ether dropped sharply off $4K resistance but, like Bitcoin, recovered throughout the week to trade back near that key resistance level.

Cryptoasset Market News

• Microstrategy announced they acquired an additional 21,550 BTC for $2.1B and now hold 423,650 BTC at $60,324 per token
• Marathon Digital, $MARA, raised funds through zero-interest converts and purchased 11,774 Bitcoin worth approximately $1.1B.
• $1.38B of crypto longs were liquidated on Monday, the highest amount since 2021
• Tether was recognized as an “accepted virtual asset” by the Financial Services Refulatory Authority of the Abu Dhabi Global Market.
• Microsoft shareholders rejected a bitcoin reserve proposal that would have seen the tech behemoth add BTC to its treasury assets
• The NYDFS gave Ripple approval to launch its stablecoin, RLUSD.

• Binance has announced a partnership with USDC to push global adoption for the stablecoin.
• Eric Trump delivered a keynote speech at the Bitcoin conference in Abu Dhabi in which he affirmed the Trump administration’s commitment to making the US the “crypto capital of the world.”

• Texas State Rep Giovanni Capriglione filed a bill to establish a strategic BTC reserve for Texas. The bill would see Texas hold its BTC for at least 5 years.
• US CPI came in as expected at 2.7% y/y, though PPI was a hotter-than-anticipated at 3.0% y/y.
• The European Central Bank, Swiss National Bank, and Bank of Canada all cut interest rates last week.

Sentiment and Flows

The sentiment gauge we watch most closely, the “Crypto Fear and Greed Index,” ticked up to 76 last week, solidly in the middle of the range that characterizes a healthy, balanced uptrend. If the index were to tick up toward 90 in the coming weeks, it could hint at an elevated risk for a pullback, but the current reading does not provide a strong contrarian signal:

Source: Alternative.me

Another way of gauging sentiment, flows into exchange-based cryptoasset investment vehicles, have remained strong over the last week. As of writing before the release of Friday’s data, Bitcoin ETFs have seen inflows of over $1.7B over the last four days alone. Over the long-term, inflows from “tradfi” investors provide incremental demand for Bitcoin and could help support the price, as we’ve seen in recent weeks.

Source: Farside Investors

Bitcoin Technical Analysis: BTC/USD Daily Chart

Source: StoneX, TradingView

Much like it was last week, Bitcoin is hovering around $100K as we go to press. The cryptocurrency has yet to break definitively above 161.8% Fibonacci extension resistance near $102K, though the sideways-to-marginally-higher price action over the last couple of weeks may serve as a “correction through time” and set the stage for another leg higher as we approach the holiday window.

Regardless, the established uptrend remains intact, with strong inflows into the asset class leading to relatively short-lived pullbacks, and therefore the path of least resistance remains to the topside.

Ethereum Technical Analysis: ETH/USD Daily Chart

Source: StoneX, TradingView

Ether had a volatile week, dropping a quick 12% from $4,000 on Monday before fighting its way back near that key psychological level as of writing. As we highlighted last week, the $4K level also marks the  78.6% Fibonacci retracement of its 2021-2022 drop, so traders are highly-focused on that barrier.

After the early week swoon, ETH/USD is no longer in overbought territory per the 14-day RSI indicator, and a break above the $4K level would leave little in the way of technical resistance until the record highs near $4800. Meanwhile, previous-resistance-turned-support at $3400 remains the level to watch to the downside, with the uptrend remaining intact as long as prices hold above that level.

-- Written by Matt Weller, Global Head of Research