Bitcoin News Today: Bitcoin ETFs Lose $175M Amid Holiday Outflows, Alts Draw Capital Shift

Bitcoin ETFs faced substantial outflows on December 24, with net withdrawals totaling $175 million. BlackRock's IBIT ETF led the exodus, losing $91.37 million alone. This marked the fourth consecutive day of outflows, with institutional investors pulling capital amid year-end portfolio rebalancing and reduced liquidity during the holiday season.

Meanwhile, Solana and XRP ETFs bucked the trend, seeing inflows of $1.48 million and $11.93 million, respectively. These movements highlighted a shift in investor sentiment, with some capital moving away from Bitcoin to altcoins. Analysts attributed the trend to diversification strategies and the appeal of less volatile assets.

The Bitcoin price dipped below $87,500 as outflows intensified, failing to reclaim the $90,000 psychological level. Institutional demand weakened, with ETFs recording over $188 million in outflows on Tuesday alone. This continued pressure raised concerns about further price corrections in the short term.

Market Dynamics and Investor Behavior

The outflows from Bitcoin ETFs have intensified market caution, particularly as traders close out positions ahead of the Christmas break. Thinning liquidity across crypto markets added to the bearish sentiment, with BTC perpetual open interest dropping by $3 billion overnight.

QCP Capital noted that historically, BTC experiences 5-7% swings during the Christmas period, driven by year-end option expirations. Over 300,000 BTC option contracts, worth $23.7 billion, were set to expire this Friday, compounding the uncertainty.

The Relative Strength Index (RSI) for Bitcoin was at 41, below the neutral 50 level, indicating bearish momentum was gaining traction. While the Moving Average Convergence Divergence (MACD) showed a bullish crossover earlier in the week, the falling histogram bars suggested waning bullish strength.

Institutional and Whale Activity

Institutional investors appeared to take a defensive stance, with SoSoValue data showing a decline in whale participation. The number of wallets holding at least 1 Bitcoin fell by 2.2% in recent weeks, signaling reduced large-holder confidence and softer market sentiment.

Michael Saylor's Strategy Inc. added $748 million to its USD reserves, bringing the total to $2.19 billion. This move underscored a more cautious approach as the company's Bitcoin holdings reached 671,269 BTC, valued at $60 billion.

Regulatory and Global Developments

Ghana's parliament passed the Virtual Asset Service Providers Bill, formally legalizing and regulating cryptocurrencies. This regulatory development was seen as a long-term positive for Bitcoin and other digital assets, aiming to improve transparency and address adoption challenges.

On the global stage, the U.S. became the biggest seller of Bitcoin, with Asian markets stepping in as primary buyers. This shift in capital flow was notable, as it deviated from traditional patterns in the crypto market.

Outlook and Analyst Insights

Analysts remain cautious but optimistic about the long-term prospects for Bitcoin. While the outflows reflect short-term institutional fatigue and liquidity constraints, many believe these movements are part of a temporary adjustment rather than a fundamental shift away from digital assets according to recent analysis.

The ETF market is expected to stabilize after the holiday season, with institutions returning to more active trading. Positive regulatory developments and macroeconomic catalysts could reignite institutional interest and drive a rebound in flows according to market forecasts.

For now, Bitcoin faces key support levels at $85,569, and a break below this threshold could trigger further corrections. Conversely, a sustained close above $90,000 could signal a recovery toward $94,253. Investors are advised to monitor these levels closely and watch for any reversal signals according to technical analysis.