What to expect from Bitcoin in the near future

Analysts associated the collapse of the crypto market on December 9 with high selling pressure from long-term Bitcoin holders taking profits. And also with investor caution ahead of the release of macroeconomic data in the United States on December 11. At the same time, the long-term forecast for price prospects for crypto assets remains positive, writes RBC Crypto.

MicroStrategy and ETFs

The drop coincided with the announcement of another bitcoin purchase by MicroStrategy – it bought another 21,550 BTC for $2.1 billion between December 2 and 8, with an average purchase price of $98,873 per bitcoin. As of December 8, MicroStrategy had 423,650 BTC on its balance sheet, on which the company spent $25.6 billion with an average purchase price of $60,324 per 1 BTC.

MicroStrategy is the most prominent supporter and largest public holder of Bitcoin. In 2020, the company, then led by Michael Saylor, became one of the first public organizations to announce the purchase of a major cryptocurrency on its balance sheet. A feature of MicroStrategy’s bitcoin accumulation strategy is the attraction of borrowed funds to purchase coins. The company periodically issues debt securities with maturities of several years in order to increase its Bitcoin reserves.

Following Donald Trump’s victory in the US presidential election in early November, MicroStrategy announced purchases of 171,430 BTC, or more than $16.6 billion at the time of publication. This amount amounted to more than 40% of all the company’s bitcoins.

Bitcoin-based exchange-traded funds (ETFs) have also seen a high volume of capital inflows since the beginning of November. How noted V Bloombergduring this period, about $10 billion came into the ETF.

Sales pressure

However, analysts believe that even this demand is not enough to meet the enormous pressure from Bitcoin holders.

The recent rise of Bitcoin above $100 thousand has led to a significant outflow of capital from long-term holders of the main cryptocurrency. According to analysts cited by Cointelegraph, this category of investors has an average Bitcoin purchase value of $24.5 thousand, which at current prices gives about 400% profit when selling Bitcoin.

Macroeconomics

The trigger for the decline in quotes could also be expectations of a reduction in interest rates by the Federal Reserve System (FRS) and inflation data in the United States for November, which will be released on December 11. said Bloomberg Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors.

In turn, analysts of the Bitfinex crypto exchange noted in a report on December 9 that the medium-term Bitcoin price outlook remains optimistic. The forecast is relevant if capital inflows from US ETFs continue in the current market conditions, they noted.

Bitfinex also believes the U.S. economy appears resilient, albeit with mixed results from the labor market and inflation pressures, according to an analysis of data in recent weeks.

Stay informed! Subscribe to World Stock Market in Telegram.