The CoinDesk 20 (CD20), an index tracking the largest cryptocurrencies by market capitalization, excluding stablecoins, saw a decline of 2.7% in the past 24 hours.
Bearish sentiment in the bitcoin (BTC) market continued late on Monday as the cryptocurrency briefly dipped below $92,000 due to profit-taking, despite another large Bitcoin purchase by MicroStrategy. By Tuesday morning in Asia, the price had slightly rebounded to over $92,800.
Traders anticipate that this range-bound price action could persist through February, following the inauguration of U.S. President-elect Donald Trump and the implementation of policies that might affect the market.
“We are doubtful about any major price movements to start the year, especially with healthy funding conditions,” said traders at Singapore-based QCP Capital in a Telegram message. “January’s average returns (+3.3%) are in line with December’s (+4.8%), so we expect the price to stay within this range for the near term, with potential upward movement starting in February.”
They added that options market activity reflects similar expectations, with volatility decreasing and demand for call options (betting on rising prices) in March increasing, partly due to significant purchases of March call options last Friday in the $120k-$130k range. This indicates optimism for BTC in March, though options pricing suggests lower immediate volatility.
Bitcoin is on track to finish December down by 4%, its worst performance since 2021, as both retail and long-term investors take profits after a 117% annual price increase. Meanwhile, data from the U.S. Chicago PMI suggests an economic slowdown, further pressuring the market, which often mirrors broader economic trends.
In its final purchase of the year, Bitcoin development company MicroStrategy added 2,138 BTC for $209 million in the week ending Dec. 29. This brings its total Bitcoin holdings to 446,400 BTC, marking its eighth consecutive week of purchases.
However, news of the purchase did little to prevent further losses. BTC prices fell in the hours following the announcement, and shares of MicroStrategy dropped by 8%, reaching their lowest levels since early November.
The bearish momentum spread across other major cryptocurrencies, with Ether (ETH), XRP, Solana (SOL), and Cardano (ADA) falling by as much as 3% before recovering. BNB Chain’s BNB remained mostly unchanged, while memecoins Dogecoin (DOGE) and Shiba Inu (SHIB) fell by 5%.
The CoinDesk 20 index, which tracks the largest cryptocurrencies excluding stablecoins, lost 2.7% in the past 24 hours.
Exchange-traded funds (ETFs) holding Bitcoin saw significant outflows, totaling $420 million on their second-to-last day of trading before the new year. Fidelity’s FBTC led the outflows, losing $154 million, followed by Grayscale’s GBTC with $130 million, and BlackRock’s IBIT with $36 million.
These products have experienced over $1.5 billion in net outflows since Dec. 19, reversing a strong inflow trend in the first half of the month, which saw nearly $2 billion in net inflows. Large outflows like this often signal a shift in investor sentiment, possibly toward a more cautious or bearish outlook on Bitcoin’s near-term performance.
