The return to the markets after the holidays and the anticipation of Donald Trump’s inauguration as President of the United States are generating bullish sentiment for bitcoin and the broader crypto market.
The asset has risen 10% in the past week, reclaiming the $102,000 level on Monday night and reversing almost all of the losses from early December. It fell from a high of nearly $109,000 on Dec. 17 to a local low of just under $92,000 on Dec. 30, momentarily sparking fears of a deeper slowdown.
The surge comes as U.S.-listed spot bitcoin exchange-traded funds (ETFs) raised $987 million on Monday, their highest level since Nov. 21, SoSoValue data shows.
Fidelity’s FBTC led the inflows with $370 million, followed by BlackRock’s IBIT with $209 million and Ark Invest’s ARKB with $71 million. Nine of the twelve ETFs recorded inflows and none showed outflows on a notable day for the cohort.
Trump’s expected crypto policies and broader economic plans have returned positive sentiment among traders, boosting BTC prices in a usual precursor to an altcoin rally.
“We believe bitcoin demand is coming through after a bearish outlook from the Fed in late December put the brakes on a Santa Claus rally,” Jeff Mei, chief operating officer at cryptocurrency exchange BTSE, told CoinDesk in a message. Telegram on Tuesday.
“Now that traders have concluded their vacation and returned to work, they have resumed buying Bitcoin, cryptocurrencies and stocks in an uptrend as we get closer to Donald Trump’s inauguration,” Mei added.
Some traders are targeting the $109,000 level in the short term before an uptrend is confirmed, setting the stage for even higher prices.
“So far, the technical picture looks like a classic correction completion with a resumption of growth from the 61.8% Fibonacci retracement level of the rally since early November,” shared Alex Kuptsikevich, chief market analyst at FxPro, on an email. “This scenario will be confirmed if the all-time highs of around $109,000 are confidently surpassed. At the same time, we expect Bitcoin’s growth to accelerate after the $100,000 mark.”
Fibonacci levels are a technical analysis tool for identifying possible support and resistance points where price movements could stop or reverse. Some traders believe that tracking Fibonacci levels can offer predictive value in identifying key price levels, which can become a self-fulfilling prophecy causing price reactions in the market.
As such, market volatility is expected to remain low until Friday’s US nonfarm payrolls (NFP) report, which some believe will kick off the new business year with “decision makers fully back on track.” work,” according to Augustine Fan, head of ideas at SOFA.
The strong NFP data could strengthen the US dollar, which could lead to higher interest rates, which may negatively impact risk assets such as stocks and bitcoin.
“However, the highest volatility event of the month is estimated to be the FOMC at the end of the month, as economic statistics will soon show signs of ‘soft landing,'” Fan added.
BTC is trading just above $101,600 in Asian morning hours on Tuesday, up 2% over the past 24 hours. The CoinDesk 20 (CD20), a broad-based liquid index that tracks the largest tokens by market cap, is up 0.53%.
