Key Points
- Bitcoin (BTC) is expected to enter 2025 in bearish correction mode, with significant cash outflows from US Spot ETF issuers.
- The cryptocurrency industry is predicted to shift from speculative to utility-focused in 2025, driven by clearer regulations, institutional adoption, and AI-crypto convergence.
Bitcoin’s price ended 2024 on a bearish note, falling below a key support level around $93K. Despite being in a correction phase since hitting nearly $100K earlier in the month, investors anticipate a bullish recovery in 2025, propelled by institutional adoption.
Industry Shift in 2025
Financial services company Franklin Templeton forecasts a shift in the cryptocurrency industry from speculation to utility in 2025. The industry is becoming a vital part of the global financial sector, spurred by clearer regulatory frameworks, institutional adoption, and significant developments in AI-crypto convergence.
Institutional Bitcoin Activity in Late 2024
Institutional demand for Bitcoin varied significantly in the final days of 2024. US spot Bitcoin ETFs recorded a net cash outflow exceeding $800 million over the last two weeks. On December 30, US spot Bitcoin ETFs saw a net outflow of around $426 million, with no issuers registering a net cash inflow.
BlackRock’s IBIT reported a net cash outflow of about $36.52 million, Grayscale’s GBTC had a net cash outflow of around $134 million, and Fidelity’s FBTC recorded a net cash outflow of approximately $154 million.
As a result, the US spot Bitcoin ETF market is predicted to end 2024 with total net assets exceeding $106 billion, making it the best-performing ETF in its debut year.
Meanwhile, MicroStrategy Inc. continued its weekly Bitcoin purchases, investing about $209 million between December 23 and 29. Consequently, the company will end the year with around 446,400 Bitcoins, accounting for more than 2 percent of the total supply.
What’s to Come?
On-chain data analysis from CryptoQuant suggests that Bitcoin’s price could continue in bearish correction in the short term, potentially finding solid support at around $80K, a level where traders have little incentive to sell. Bitcoin’s price also lost a key support level around $93k in the past 24 hours, potentially signaling further selloffs in the near term.
From a technical analysis perspective, Bitcoin’s price has been forming a bearish reversal pattern over the past few weeks. Coupled with the bearish divergence on the Relative Strength Index (RSI), Bitcoin’s price closing below the 50-day Moving Average (MA) over the past five days indicates further bearish sentiment.
However, crypto analyst Ali Martinez remains optimistic that the macro Bitcoin bull run is not over, as the bear market typically begins once the monthly RSI reaches 92 and it is currently around 75%.
