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Bitcoin is testing a critical support zone, and maintaining its position here is essential. A failure to hold these levels could signal the completion of a Head-and-Shoulders pattern, potentially pushing prices well below $90k. Adding further uncertainty, reports have surfaced that the US government has been cleared to liquidate up to 69,370 BTC, valued at approximately $6.5 billion, from the Silk Road seizure. With Trump’s inauguration just days away, he has pledged not to sell any of the bitcoin held by US authorities, which may prevent immediate selling pressure, but the mere news of this could still unsettle market participants.
The market is highly reactive to shifts in the US dollar and the 10-year yield, both of which must be monitored closely to assess the risk appetite for risk assets. Concerns around Trump’s tariff and tax policies are adding to fears of rising inflation, creating a volatile environment that complicates forecasts for interest rates, economic growth, and inflation due to the unpredictability surrounding his administration's actions.
In the crypto ETF space, Bitcoin saw a substantial outflow of $568.8 million, marking its second-largest outflow on record, while Ethereum also experienced outflows of $159.4 million. These withdrawals highlight the ongoing strain in the market, as concerns over US inflation fears suppress expectations for Fed rate cuts and contribute to heightened bond market volatility.
Minutes from the Fed’s December meeting revealed that most committee members believe the risks to inflation are tilted to the upside, further fueling concerns that rate cuts may be more limited than previously anticipated. The Fed signaled a cautious approach to rate cuts, citing ongoing uncertainty.
After digesting a series of economic reports, all eyes are now on Friday’s December payrolls data, which will provide further insights into the health of the economy.
The News Room
Fidelity’s Spot Bitcoin, Ether ETFs Face Largest Daily Net Outflows Since Inception
Fidelity’s U.S. spot Bitcoin and Ethereum ETFs experienced their largest single-day net outflows on Wednesday. Spot Bitcoin ETFs saw total net outflows of approximately $582 million, led by Fidelity’s FBTC with $258.7 million, while spot Ether funds recorded $159 million in net outflows, with Fidelity’s FETH accounting for $147.7 million. This marks the highest daily outflow since these funds’ inceptions. Despite record withdrawals, Fidelity’s ETFs still rank second in cumulative net inflows among spot Bitcoin and Ether funds, with substantial trading volumes supporting ongoing investor interest.
Crypto Liquidations Exceed $520 Million in 24 Hours Amid Soaring Market Volatility
In the past 24 hours, cryptocurrency markets saw over $524 million in forced liquidations as volatility surged, affecting nearly 186,000 traders on centralized exchanges. Bitcoin accounted for more than $142 million of these liquidations—about $101 million from long positions—while Ether saw approximately $90 million liquidated. These liquidations occur when traders cannot meet margin requirements amid sharp price movements. During this period, Bitcoin dropped 2.26% to around $94,314, following a brief surge above $100,000 earlier in the week amidst market optimism.
US Entities Outpace Offshore Peers With 65% More Bitcoin Holdings
As of January 6, CryptoQuant data reveal that U.S. entities now hold 65% more Bitcoin than non-U.S. peers—a ratio that climbed from 1.24 in September 2024 to 1.65—driven by heightened institutional activity spurred by Donald Trump’s reelection and his pledge to build a national strategic Bitcoin reserve. This surge includes significant purchases by major holders like MicroStrategy, ETFs, exchanges, and miners, which helped Bitcoin break above $100,000 and attracted substantial ETF inflows, now accounting for 5.74% of the Bitcoin market capitalization. The increasing dominance of U.S. Bitcoin holdings has prompted interest from foreign authorities in creating their own reserves, although some experts, such as economist Steve Hanke, criticize the focus on Bitcoin reserves rather than investing in productive economic assets that drive long-term growth.
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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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