Key Points
- Bitcoin soared to nearly $99k following a rebound in U.S demand, as indicated by the Coinbase Premium Index.
- Bitcoin ETFs in the U.S saw $908M in daily net inflows, marking a monthly high.
Bitcoin’s value surged close to $99k on Friday, 03 January, due to a rebound in demand from the U.S. This was signaled by the Coinbase Premium Index.
The index had earlier fallen to a 12-month low due to a risk-off approach by U.S retail and institutional investors during the holiday season.
Reclaiming the 14-day Simple Moving Average
The index also recently reclaimed the key 14-day Simple Moving Average (SMA) for the first time in nearly a month. According to CryptoQuant analyst Burak Kesmeci, this signifies a resurgence of U.S buyers in the market.
When the Coinbase Premium Index surges above SMA14, it signals Bitcoin buyer dominance. This event is an early indicator that U.S.-based buyers are regaining dominance in the market.
Bitcoin ETFs See High Inflows
This trend was also evident in the U.S Bitcoin (BTC) ETFs complex. They recorded $908M in daily net inflows on Friday, marking a monthly high. In fact, even BlackRock’s IBIT, which began the year with outflows, saw $253M in inflows on Friday.
Fidelity’s FBTC led the demand with $357M and Ark Invest’s ARKB came in third with $222M inflows. Collectively, this indicated that institutional demand was back and aided BTC’s steady push to $98.9k.
The extended recovery was driven by a liquidity hunt as a huge pile of short positions was located at the $98k-level earlier in the week. Now, the upside liquidity is located between $99k and $100k.
Lower liquidity levels seemed to be located at $97.2k, $96k, and $95k. Given that more liquidity seemed to be concentrated on the lower side of the price action at press time, a drop towards $97K-$95K can’t be overruled.
The liquidation heatmap suggested that BTC could enter a price range between $96k and $100k in the short term. However, it remains to be seen whether strong BTC ETF demand will trigger a bullish breakout above $100k.