Market Overview
As of the latest reports, the crypto market capitalization has experienced a subtle drop of 0.2% over the past 24 hours and a more significant 2.2% decrease over the week, settling at approximately $3.06 trillion. A noteworthy resilience has emerged, allowing the market to withstand the bears’ test at the crucial $3.0 trillion level, which it has maintained for the past 10 days. However, the recent transition from an upward trend to a more horizontal support phase raises concerns among buyers.
Recent sentiment index readings have plunged to 16, the lowest observed in almost three weeks. This signals a cyclical vulnerability in the market. The lack of a prominent market driver, reminiscent of the conditions observed in April, suggests that the extended phase of extreme fear in the crypto community may parallel sentiments seen at the close of 2021.
Bitcoin, following an early dip below $87.5K on Monday, has since begun to recover and is edging closer to $90K. The selling pressure witnessed since last week has disrupted the upward momentum that prevailed since late November. Current projections indicate a possible return to the $81K mark. Nevertheless, there remains hope among bullish enthusiasts for a more extended consolidation period that could lead to future growth rather than an abrupt sell-off.
News Background
According to recent findings from SoSoValue, net inflows into spot Bitcoin ETFs have surged to $286.6 million, marking the highest weekly total in seven weeks. Since the inaugural approval of Bitcoin ETFs in January 2024, total inflows have reached a staggering $57.90 billion. Ethereum ETFs in the U.S. have also seen robust activity, with net inflows hitting $208.9 million for the week, bringing cumulative figures since their July 2024 launch to $12.88 billion. Notably, Solana, a newer entrant to the ETF space, attracted $36 million in inflows this week, accumulating $675 million over its seven-week existence. Additionally, spot XRP ETFs launched on November 14 have soared past $974 million in inflows, demonstrating sustained interest in this segment.
Despite these promising ETF inflows, the broader crypto market has faced a decline, with total capitalization plunging by 15% over the last 30 days. This downturn underscores a deep correction phase, as highlighted by Binance Research. December, traditionally a month characterized by reduced liquidity, is likely to witness increased market volatility.
Looking ahead, projections suggest that Bitcoin may close the year below the psychological threshold of $100,000, with sentiments from users on the Kalshi prediction platform indicating only a 23% chance of exceeding this pivotal milestone.
On a broader scale, it’s evident that large corporations, governments, centralized exchanges, and investment funds now hold about 29.8% of the total circulating Bitcoin volume, according to calculations from Glassnode. This concentration could further impact market dynamics.
Interestingly, figures from Vanguard suggest that Bitcoin is more appropriately viewed as a speculative collectible rather than a traditional asset. Unlike conventional assets, Bitcoin lacks properties such as income generation, compound interest, or cash flow.
In regulatory news, international rating agency Moody’s has released a new set of criteria designed to assess the credit ratings of fiat-pegged stablecoins. Tether’s USDT may be facing scrutiny as experts anticipate a potential downgrade. In a related development, S&P Global recently lowered USDT’s stability rating to the fifth-lowest level, raising concerns among investors and analysts alike.
