This Week’s Recap
Bitcoin remains a focal point for industry forecasts, with analysts projecting its price could reach $200,000 by 2025. This optimism is rooted in expectations of greater institutional participation through ETFs, advancements in tokenized real-world assets, and a potentially favorable regulatory backdrop under a Trump-led administration. However, this long-term vision came into contrast with recent market activity. BlackRock’s iShares Bitcoin Trust experienced a $333 million single-day outflow on January 2—the largest since its inception. This sharp movement suggests investors are recalibrating their strategies, reflecting broader caution despite the strong ETF narrative.
Ethereum’s performance presented a different picture. December saw over $2.6 billion in net inflows into Ether ETFs, signaling robust demand for Ethereum-based investment products. The inflows suggest institutional investors are recognizing Ethereum’s utility in areas like DeFi and RWA tokenization. T While Ethereum lagged Bitcoin in institutional focus throughout 2024, these inflows indicate that as investors complete their due diligence, Ethereum could close the gap and establish itself as a competitive choice in diversified portfolios.
Regulatory developments continued to shape the global landscape, with Singapore solidifying its role as a leading hub for Web3 companies. Doubling its crypto license approvals in 2024, the country has positioned itself as a model for balancing innovation and oversight. Its approach contrasts with the regulatory uncertainty in the U.S., where Coinbase secured a narrow legal win in its ongoing battle with the SEC. A U.S. federal judge allowed Coinbase to appeal a key issue about whether certain crypto tokens are securities, which could lead to a more definitive regulatory framework for the industry.
Tether also made headlines, starting the year with $5 billion in profits and apparent backing from the White House. This represents a shift in sentiment toward stablecoins, which are increasingly being recognized as critical components of the financial system. Tether’s ability to maintain its market position despite longstanding scrutiny demonstrates the resilience of stablecoins in global commerce.
In other news, the FTX repayment plan officially went live, offering a step forward for users seeking to recover funds from the collapsed exchange. While progress is being made, the warning about phishing scams associated with the repayment process highlights the ongoing need for vigilance in a space where trust remains fragile.
Overall, the week’s events reveal a market navigating a mix of optimism and caution. Institutional adoption, regulatory shifts, and innovation continue to drive the industry forward, even as it contends with volatility and trust challenges. These developments reflect a sector steadily maturing while adapting to an evolving landscape.
Crypto Headlines & Industry Updates
Bitcoin could soar to $200,000 in 2025, driven by factors like exchange-traded funds, artificial intelligence, real-world asset tokenization, and a crypto-friendly Trump administration, according to industry experts.
Total net inflows into Ether exchange-traded funds (ETFs) surpassed $2.6 billion in December as the funds gained traction against wildly popular Bitcoin ETFs, according to data from Farside Investors.
Singapore is becoming a key destination for Web3 companies after it issued twice as many crypto licenses in 2024 as in the previous year. Singapore may emerge as the next major cryptocurrency hub in Asia thanks to its innovation-friendly regulatory regime, according to William Croisettier, chief growth officer of ZKcandy.
BlackRock’s iShares Bitcoin Trust (IBIT) recorded its biggest daily outflow since it launched a year ago, as US trading resumed following the New Year’s Day closure. BlackRock’s spot Bitcoin exchange-traded fund saw a record outflow of $332.6 million on Jan. 2, according to data from Farside Investors.
Tether opened 2024 under a cloud. For years, law enforcement agencies have suspected that criminals have increasingly turned to Tether’s stablecoin, USDT, to launder dirty money.
The reorganization plan for defunct cryptocurrency exchange FTX, still going through bankruptcy proceedings, took effect on Jan. 3 and will allow users to begin receiving repayments. In a Jan. 3 X post, FTX debtors said users requesting funds should be wary of phishing emails designed to look like they were sent from the exchange.
Coinbase Inc. gets to pitch a major legal question to a higher U.S. court, potentially speeding along a final answer over whether certain crypto tokens should be treated as securities. A federal judge granted the company a request for a special, narrow appeal to the U.S. Court of Appeals for the Second Circuit, which could take up this core dispute between Coinbase and the Securities and Exchange Commission.
Barr to step down as Fed’s vice chair for supervision on Feb. 28. Trump now free to appoint all new bank regulators. Barr’s move limits Trump’s options for naming a successor
Bitcoin Market Analysis
Bitcoin’s price action has recently retraced to $94K after breaking above the $100K resistance to attempt an ATH of $108K. While this pullback may concern short-term traders, it also offers an opportunity to reassess market dynamics in light of shifting technical, on-chain, and sentiment indicators.
Technical Overview
The breakout above $100K initially confirmed a resistance breakout pattern, a signal that buyers absorbed supply at this critical level. However, the retracement to $94K raises questions about immediate buying pressure and market confidence.
- Trend: Long-term trend remains bullish, supported by sustained upward momentum. However, the short-term pullback suggests consolidation below $100K.
- Support Levels: Nearest support is now $90K, followed by $74K if selling pressure intensifies. Traders should monitor these zones for potential swing entries.
- Momentum: RSI remains neutral (neither overbought nor oversold), indicating room for movement in either direction.
Source: https://altfins.com
Stablecoin Dynamics: Weakening Buying Pressure
A deeper look into market sentiment reveals concerning signals from stablecoin flows, particularly on Binance. Binance saw significant inflows of $13 billion in early December, but this trend has reversed, with stablecoin outflows dominating since mid-December. Reduced stablecoin reserves indicate weakening buying pressure. Historically, such trends, like in May 2024, preceded significant price corrections.
Source: https://cryptoquant.com/profile/u/Darkfost
This dynamic reflects broader investor caution, with many securing profits or moving capital off exchanges.
Institutional Activity: Whales Step In
Despite the cautious sentiment indicated by stablecoin flows, institutional behavior provides a counterbalancing narrative. After the December dump of 79,000 BTC, institutions re-entered the market below $95K. Over the past 30 days, they accumulated more than 34,000 BTC, signaling confidence in Bitcoin’s long-term potential. Since June 2023, institutional accumulation has been a consistent trend, even as retail participation remains at a 5-year low.
Source: https://cryptoquant.com/profile/u/caueconomy
This accumulation phase highlights the market’s maturity, where institutions play a stabilizing role during periods of consolidation.
Key Takeaways
The confluence of technical, sentiment, and on-chain data underscores the importance of a well-rounded market approach. Key insights for traders include:
- Trade Key Levels: Resistance breakouts, like the one at $100K, can signal bullish momentum. However, retracements (e.g., to $94K) often provide opportunities to enter at better prices.
- Monitor Stablecoin Flows: Declining stablecoin reserves can act as early warning signs for weakening market liquidity.
- Follow Institutional Trends: Whale accumulation during corrections often signals a bottoming process, offering clues for long-term positions.
Conclusion
Bitcoin’s retracement to $94K highlights the market’s inherent volatility. While the technical breakout above $100K remains a bullish signal, the weakening stablecoin inflows and cautious sentiment warrant vigilance. However, institutional accumulation below $95K provides a silver lining, suggesting strong demand at lower levels.
Traders should watch $90K as a critical support and $108K as immediate resistance, while staying attuned to stablecoin dynamics and whale activity to navigate the next phase of Bitcoin’s price action.
Mark Your Calendars
Economic Data
January 8, 2025
- ADP Employment Report : Labor market trends will provide a precursor to Friday’s employment data.
- Fed’s December FOMC Meeting Minutes: Insights into the Fed’s monetary policy outlook could significantly impact risk assets like Bitcoin.
January 10, 2025
- U.S. Employment Report: These metrics will shape expectations around Fed policy and market sentiment.
Token Unlocks
January 9, 2025
- Movement (MOVE): Unlock of 50 million MOVE tokens (2.22% of circulating supply) approximately $43.52 million at current prices, potentially increasing market liquidity and selling pressure.
January 11, 2025
- Aptos (APTOS): Unlock of 11.31 million APTOS tokens (2.04% of circulating supply) approximately $101.11 million at current prices. May impact short-term price dynamics due to increased supply.
