Is BTC’s Dominance at Risk?

The cryptocurrency market experienced a notable shift in the last 24 hours, with Bitcoin, Ethereum, and several altcoins making a significant comeback. Bitcoin, the dominant cryptocurrency, surged from $94,000 to $99,000, a movement often referred to as a “Santa Claus rally.” However, this surge could also signify a strategic profit-taking endeavor. Currently, Bitcoin holds steady above $98,000, but traders remain vigilant as the year-end expiration of contracts looms.

Meanwhile, ETFs have also faced challenges, losing a substantial $1.4 billion within just four days. Earlier this year, ETFs provided a much-needed boost to the stagnating market, but their appeal diminished over time. Nevertheless, analysts remain optimistic about a potential revival. With the influx of Ethereum ETFs, the market might be hinting at an early altcoin rally. Let’s explore the details!

US Spot BTC ETFs Are Bleeding

BlackRock’s Bitcoin ETF, known as the iShares Bitcoin Trust (IBIT), experienced a significant outflow of $188.7 million on Christmas Eve, marking its largest single-day withdrawal. This event was part of a larger pattern, with Bitcoin funds collectively losing $1.5 billion during a four-day period from December 19 to 24. Other Bitcoin ETFs, including those managed by Fidelity and ARK 21Shares, also witnessed substantial outflows. Interestingly, Bitwise Bitcoin ETFs were the exception, recording an inflow during this period.

Altcoins Take the Lead

In contrast, Ethereum ETFs are experiencing a steady increase in interest, with traders showing a growing affinity for altcoins as Bitcoin’s market dominance wanes slightly. During the downturn, Ether funds saw $53.6 million in inflows, followed by a notable $130.8 million inflow the following day. Despite a sluggish start earlier this year, analysts speculate that Ether may outperform Bitcoin by January 2025, as the ETH/BTC ratio demonstrates strength.

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What’s Next for Bitcoin?

The recent outflows from BlackRock’s Bitcoin ETF, coupled with the broader trend of Bitcoin ETF withdrawals, have left investors pondering their next steps. Crypto analyst Skew has highlighted that passive ask liquidity is currently positioned around $100,000, with key price levels identified at $105,000. He suggests that major market players could be strategically positioning themselves for higher prices as we enter the new year.

Bitcoin’s price recently experienced a 4% jump, reaching $98,014, although trading volume has declined by 24%, indicating reduced interest among traders. It is crucial for traders to closely monitor trading volume and market sentiment, especially with significant BTC options set to expire this Friday, adding another layer of uncertainty to the market.

The shifting focus of investors suggests that Bitcoin’s dominance might soon face challenges. Only time will reveal the direction the market will take.