Bitcoin capped by technical resistance as ETF inflows and macro forces collide

​​​Bitcoin capped by technical resistance

​Over the past month Bitcoin has traded in a volatile but broadly range-bound fashion as investors digest shifting macroeconomic signals, uneven institutional flows and signs that the market is transitioning from a sharp correction into a consolidation phase.

​The period began with a pronounced sell-off in late November, when Bitcoin fell more than 30% from its October record high near $126,000 towards the $80,000 region.

​Analysts attributed the decline to a combination of heavy liquidations in leveraged positions, thin liquidity conditions and a broader risk-off move across global markets as investors reassessed interest-rate expectations and growth prospects.

​Several market commentators noted that the speed of the drop suggested forced selling rather than a fundamental change in Bitcoin’s longer-term narrative.

​Following that correction, Bitcoin stabilised and spent much of December oscillating between roughly $85,000 and $94,000. This sideways price action has coincided with renewed, though inconsistent, activity in spot Bitcoin exchange-traded funds (ETFs).

​Data published over the past two to three weeks show that after a period of sustained outflows, some of the largest US-listed spot Bitcoin ETFs recorded their strongest net inflows in weeks, signalling a partial return of institutional demand and driving the Bitcoin price back towards the $94,000 region.

​Macroeconomic developments have remained a central influence. The US Federal Reserve’s (Fed) widely anticipated December rate cut helped to steady sentiment across risk assets, but Bitcoin’s response was muted compared with earlier easing cycles.

​Analysts have suggested that while lower interest rates are generally supportive for non-yielding assets such as Bitcoin, investors are now more focused on the pace of future easing and the resilience of the global economy.

​Uncertainty around US growth data and diverging global policy paths - including speculation about the Bank of Japan’s (BoJ) stance - has contributed to ongoing volatility in Bitcoin and other crypto assets.

​Corporate and institutional behaviour has also shaped sentiment over the past few weeks. Strategy, one of the largest corporate holders of Bitcoin, indicated that it may consider selling part of its holdings under certain conditions, a notable departure from its long-standing buy-and-hold messaging.

​While no immediate liquidation was announced, the comments introduced the possibility of additional supply entering the market and added caution among traders during the latter half of December. At the same time, other long-term investors have argued that the recent pullback represents consolidation rather than the start of a new bear market, pointing to Bitcoin’s ability to hold above key support levels despite repeated tests.

​From a broader perspective, Bitcoin’s recent performance reflects a market in transition. On one hand, easing monetary policy, intermittent ETF inflows and continued interest from long-term holders provide a degree of underlying support. On the other, mixed institutional flows, lingering macro uncertainty and sensitivity to global risk sentiment have prevented a decisive move higher.

​Analysts note that reclaiming resistance near the $94,000s would be an important step toward restoring upside momentum, while a renewed break below the mid-$80,000.00s could reopen downside risks.

​Taken together, the past few weeks suggest that Bitcoin is consolidating after a sharp correction, with neither bulls nor bears firmly in control.

​As the market moves into the new year upside momentum prevailed, though, but Bitcoin’s future direction is likely to depend on whether institutional flows stabilise, macroeconomic signals become clearer and confidence returns to risk assets more broadly. Until then, Bitcoin appears set to remain sensitive to news flow and prone to further swings within its established trading range.

​Bitcoin bullish case:

​Bitcoin's recent rally towards its key $94,095.33-to-$94,766.54 resistance zone - made up of the mid-November low and the December and January highs - is encouraging for the bulls.

​A rise and daily chart close above Monday's $94,766.54 high is needed, though, for a break of the $94,095.33 - $94,766.54 resistance area to take place. If so, it may trigger a swift rally towards the psychological $100,000.00 region.

​For the bulls to be fully back in control, the 11 November high at $107,461.75 would need to be exceeded.

​Bitcoin bearish case:

​Since Bitcoin has once again been rejected by its $94,095.33 - $94,766.54 resistance zone, a slip towards the $93,104.72 late November high may well occur.

​If slid through, the area between the mid-to-end-December highs at $90,559.10 - $90,332.98 may be revisited but would be expected to offer at least interim support.

​Only a fall through the early December $83,871.20 low would push the November trough at $80,619.71 back on the map.

​Short-term outlook:

Bullish while above $90,000.

​Medium-term outlook:

Neutral with a bullish bias while trading below the current January high at $94,766.54 but above the $80,619.71 late November low 

Bitcoin daily candlestick chart