The CoinDesk 20 (CD20), an index tracking the top 20 cryptocurrencies by market capitalization, excluding stablecoins, declined by 2.7% in the last 24 hours.
Bitcoin (BTC) continued its downward trajectory late Monday, briefly falling below $92,000 as profit-taking took hold, despite a major Bitcoin acquisition from MicroStrategy. By Tuesday morning in Asia, the price had slightly bounced back, hovering just above $92,800.
Many traders foresee this range-bound price action continuing through February, particularly as President-elect Donald Trump prepares to assume office and introduce policies that could impact the market.
“We don’t expect any significant price movements to kick off the year, especially with funding conditions remaining robust,” stated traders from Singapore’s QCP Capital in a Telegram update. “January’s typical returns (+3.3%) align closely with December’s (+4.8%), and we believe Bitcoin will remain in this range before a potential shift in February.”
Options flows reflect the same sentiment, with volatility on the decline and call options for March showing increased demand. These calls, which bet on higher Bitcoin prices, gained traction, especially in the $120k-$130k range. This suggests that traders are positioning for potential upside in March, though options pricing signals limited short-term volatility.
Bitcoin is on course to finish December down by 4%, marking its worst performance since 2021. This decline comes after an impressive 117% rally throughout the year, as both retail and long-term investors took profits. Furthermore, the U.S. Chicago PMI, indicating a slowdown in economic activity, is adding pressure to the market, which is often influenced by broader economic conditions.
In its final Bitcoin purchase of the year, MicroStrategy added 2,138 BTC, valued at $209 million, in the week ending Dec. 29. This brought its total Bitcoin holdings to 446,400 BTC, marking its eighth consecutive week of acquisitions.
Despite the purchase, Bitcoin prices continued to fall following the announcement, and shares of MicroStrategy dropped by 8%, hitting their lowest point since early November.
The downturn extended to other major cryptocurrencies, with Ether (ETH), XRP, Solana (SOL), and Cardano (ADA) dropping by as much as 3% before partially recovering. BNB Chain’s BNB remained mostly stable, while memecoins Dogecoin (DOGE) and Shiba Inu (SHIB) fell by about 5%.
The CoinDesk 20 index finished down by 2.7%, reflecting the overall negative sentiment in the market.
Bitcoin exchange-traded funds (ETFs) saw a significant outflow of $420 million on the second-to-last day of trading before the new year. Fidelity’s FBTC saw the largest outflow, losing $154 million, followed by Grayscale’s GBTC with $130 million, and BlackRock’s IBIT at $36 million.
These funds have experienced over $1.5 billion in net outflows since Dec. 19, reversing a strong inflow trend earlier in the month when nearly $2 billion flowed in. Large outflows like these are often a signal of shifting investor sentiment, suggesting a more cautious or bearish outlook on Bitcoin’s short-term future.
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