Outflows from spot ETFs intensified by year-end

[Ben Graham]

According to data, in the run-up to the Christmas holidays, there is a net outflow of funds from American spot ETFs for Bitcoin and Ethereum.

Data from SoSoValue shows that on Tuesday, a net outflow of $188.6 million was recorded from spot Bitcoin ETFs, extending the negative streak to four consecutive days. The largest outflow among the funds was seen in BlackRock's IBIT, which faced outflows of $157.3 million. Outflows were also reported for Fidelity's FBTC, Grayscale's GBTC, and Bitwise's BITB.

In total, spot Bitcoin ETFs experienced a net outflow of $497.1 million last week, offsetting an inflow of $286.6 million for the week ending December 12.

Meanwhile, on Tuesday, a net outflow of $95.5 million was recorded from spot Ethereum ETFs, compared to an inflow of $84.6 million the day before. The leader in outflows was Grayscale's ETHE, which had $50.9 million exits.

Although these outflows are not critical in scale, they are certainly not beneficial for traders hoping for a year-end Santa Claus rally. Many experts point to the cyclical nature of the crypto market, where periods of rapid growth are inevitably followed by corrections, emphasizing that outflows from ETFs do not necessarily indicate a negative trend for the entire market; rather, they may signify a shift in liquidity to other instruments, such as decentralized platforms or direct investments in cryptocurrency.

It is important to note that the current situation differs from previous pre-holiday periods. In particular, the influence of institutional investors on the crypto market has significantly increased, and their behavior undoubtedly impacts the overall dynamics. Therefore, a more accurate assessment of the situation requires considering a broad range of factors, including macroeconomic trends, geopolitical conditions, and regulatory changes.

Trading recommendations

Regarding the technical outlook for Bitcoin, buyers are currently targeting a return to the $87,400 level, which opens a direct path to $89,600, and from there it's just a step away to $92,300. The furthest target will be the peak around $95,000, with a breakout at this level indicating attempts to return to a bull market. If Bitcoin falls, I expect buyers at the $85,500 level. A move below this area could quickly drag BTC down to around $83,220, with the furthest target being the $81,200 area.

As for the technical picture of Ethereum, a clear consolidation above the $2,997 level opens a direct road to $3,105. The ultimate target will be the peak around $3,233, with a breakthrough indicating strengthening bullish sentiment in the market and renewed interest from buyers. If Ethereum falls, I expect buyers at the $2,887 level. A retreat below this area could swiftly push ETH down to around $2,763, with the furthest target being the $2,684 region.

What's on the chart

• Red lines represent support and resistance levels, where price is expected to either pause or react sharply.
• The green line shows the 50-day moving average.
• The blue line is the 100-day moving average.
• The lime line is the 200-day moving average.

Price testing or crossing any of these moving averages often either halts movement or injects fresh momentum into the market.

The material has been provided by InstaForex Company - www.instaforex.com