Bitcoin Prices Set for Breakout Amid Significant ETF Outflows

Bitcoin's market is currently poised for a potential breakout as it consolidates within a symmetrical triangle pattern amid considerable outflows from spot exchange-traded funds (ETFs). With over $780 million leaving these ETFs recently, institutional sentiment seems weak, impacting Bitcoin prices. As traders assess market conditions, the cryptocurrency briefly reclaimed the $90,000 mark but faces challenges moving forward.

Key Takeaways

Bitcoin is observing a symmetrical triangle pattern indicating a possible breakout.
Spot BTC ETFs faced over $780 million in net outflows recently, signaling weak institutional confidence.
Geopolitical tensions and increased demand from retail traders are supporting Bitcoin prices.
The $90,975 level is crucial; a breakout above this point could push prices higher, while a drop below $87,000 may indicate bearish trends.

Bitcoin price eyes symmetrical triangle breakout as weekly ETF outflows top $780M.

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Bitcoin's price is eyeing a significant breakout from a consolidation phase as buyers regain momentum. Concurrently, there have been over $780 million in net outflows from spot Bitcoin exchange-traded funds (ETFs).

According to recent data from crypto.news, the price of Bitcoin dropped from $90,000 on December 22, sliding down to around $86,740 by Christmas Eve. While bulls attempted to reclaim the $90,000 level again, they faced resistance just above $89,000 on Friday, leading to trading in the $87,000-$88,000 range throughout the weekend.

The decline in Bitcoin's price coincided with persistent outflows from spot ETF funds, contrasting with the significant inflows observed in the second and third quarters, which had driven Bitcoin's rally toward an all-time high of $126,080 in October.

As reported by SoSoValue, the twelve spot BTC ETFs experienced approximately $782 million in net outflows between December 22 and December 26. This trend brings the total net outflows in December to $1.08 billion and $3.48 billion from the previous month. Such outflows may indicate that long-term confidence from institutional investors is diminishing, which could keep overall market sentiment muted.

In addition, Bitcoin's price has been tempered by lowered expectations for Federal Reserve rate cuts in January and the months that follow. Recent statements from Fed Chair and other key officials suggest a more conservative approach toward rate adjustments. As of the latest data from Polymarket, the likelihood of a 25 basis point rate cut stands at 13%, while the chance of maintaining the current rate is at 87%.

On December 25, Bitcoin managed to briefly rise above the $90,000 mark, reaching just over $90,200, but settled back at $89,830 by the time of reporting. The recent increase in Bitcoin prices seems attributed to escalating geopolitical tensions between Russia and Ukraine, which have prompted higher oil prices and driven traders toward safe-haven assets, including Bitcoin, often considered a digital hedge against uncertainty.

Moreover, rising demand from derivative traders has supported Bitcoin price gains. Notably, short-term retail traders are driving much of the recent activity. Data from CoinGlass indicates that the Bitcoin weighted funding rate has surged to one of its highest levels since October, suggesting that more investors are betting on further short-term price increases for Bitcoin. Additionally, Bitcoin futures open interest has shown a 7% increase in the past 24 hours, reflecting more market participants, potentially reinforcing price momentum.

Analyzing the 4-hour chart, Bitcoin's price action has developed a symmetrical triangle formation since mid-November. Although this pattern is generally viewed as neutral, a breakout above the upper trendline could act as a bullish signal for sustained upward movements.

Bitcoin price has formed a symmetrical triangle pattern on the 4-hour chart.

Currently, bulls seem to hold a technical edge over the market, as reflected by an Aroon Up at 100% compared to an Aroon Down of 7.14%, indicating significantly stronger buyer interest than selling pressure. The MACD lines have also surpassed the zero line and continue to trend upward, further confirming a potential shift toward positive momentum.

Traders are paying close attention to the $90,975 level, which aligns with the 38.2% Fibonacci retracement level. A decisive breakout above this point with substantial volume could confirm the pattern breakout and might propel the price to approximately $94,200—a level reached earlier this month before a pullback.

While the upward momentum appears favorable, closing below the $87,000 support area could invalidate the immediate bullish outlook, potentially leading Bitcoin towards the psychological threshold of $85,000.