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Cryptocurrency

Bitcoin traders anticipate hitting $109k due to Trump anticipation and nearly $1 billion influx from BTC ETFs.

Horizonstocks

As the holiday season comes to an end, markets are experiencing a significant boost in sentiment, with bitcoin leading the charge. The digital asset has surged 10% in the past week, reclaiming the $102,000 level and reversing nearly all losses from early December.

A Return to Markets Brings Bullish Sentiment

The sudden uptick in prices can be attributed to the return of traders to markets after the holidays. With Donald Trump’s inauguration as U.S. president on the horizon, anticipation is building, and investors are positioning themselves for potential gains.

"We believe that the demand for bitcoin is manifesting itself after a downbeat Fed outlook in late December put the brakes on a Santa Claus rally," said Jeff Mei, COO at crypto exchange BTSE, in a recent interview with CoinDesk. "Now that traders have wrapped up their vacations and are back to work, they’ve resumed purchases of Bitcoin, crypto, and stocks in a bullish trend as we approach Donald Trump’s inauguration."

U.S.-Listed Spot ETFs See Record Inflows

The surge in bitcoin prices has been accompanied by significant inflows into U.S.-listed spot exchange-traded funds (ETFs). According to data from SoSoValue, these funds raked in $987 million on Monday, their highest since November 21. Fidelity’s FBTC led the charge with $370 million pouring in, followed closely by BlackRock’s IBIT with $209 million and Ark Invest’s ARKB with $71 million.

Nine of Twelve ETFs Record Inflows

In a standout day for the cohort, nine out of twelve U.S.-listed spot ETFs recorded inflows, with none showing outflows. This level of interest highlights the growing demand for exposure to the crypto market through these financial products.

Trump’s Policies and Economic Plans Bring Positive Sentiment

The anticipation of Trump’s policies and economic plans has brought back positive sentiment among traders. As a result, prices have risen in what is usually a precursor to an altcoin rally.

"Some traders are targeting the $109,000 level in the short term before a bullish trend is confirmed, setting the stage for even higher prices," said Alex Kuptsikevich, FxPro chief market analyst. "So far, the technical picture looks like a classic correction completion with a resumption of growth from the Fibonacci retracement level of 61.8% of the rally since the beginning of November."

Fibonacci Levels Offer Predictive Value

Some traders believe that tracking Fibonacci levels can offer predictive value in identifying key price levels, which may become a self-fulfilling prophecy causing price reactions in the market.

"Fibonacci levels are a technical analysis tool to identify potential support and resistance points where price movements might pause or reverse," explained Kuptsikevich. "This scenario will be confirmed if the historical highs of around $109,000 are confidently breached."

Market Volatility Expected to Remain Low

Until the U.S. Nonfarm payrolls (NFP) report on Friday, market volatility is expected to remain low. Some believe that strong NFP data could strengthen the U.S. dollar, potentially leading to higher interest rates, which can negatively affect risk assets like stocks and bitcoin.

"However, the highest volatility event for the month is priced to be FOMC at the end of the month as the economic stats are priced to show ‘soft landing’ signs soon," said Augustine Fan, head of insights at SOFA. "We expect Bitcoin’s growth to accelerate after the $100,000 mark."

Current Price and Market Trends

As of writing, BTC trades just above $101,600 in Asian morning hours Tuesday, up 2% in the past 24 hours. The broad-based CoinDesk 20 (CD20), a liquid index tracking the largest tokens by market cap is up 0.53%.

In conclusion, the surge in bitcoin prices can be attributed to the return of traders to markets and anticipation of Trump’s inauguration as U.S. president. With positive sentiment building, investors are positioning themselves for potential gains, highlighting the growing demand for exposure to the crypto market.

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