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Bitcoin (BTC) recovered to over $87,500 when the Bank of Japan increased the interest rates, but remained conservative. This strategy helped calm investors' fears of a sudden unwind of the yen carry trade, which would push risk assets, such as cryptocurrencies, higher.
The Japanese yen also declined after the BoJ rate announcement, with USD/JPY ending at 157.703, up 1.45%. The depreciated yen led to a shift of funds into other assets, resulting in a 3.22% appreciation in Bitcoin during the period. However, BTC failed to reclaim the $90,000 level, showing a lack of market acceptance.
According to analysts, the BoJ's tone could be a stabilizing factor for crypto markets in the short term. Nevertheless, the future of Bitcoin depends on central bank intervention and macroeconomic trends. The future viability of the BTC recovery will depend on future statistics and overall risk sentiment.
Bitcoin ETF products listed in the US experienced net outflows of $479.1 million by the week ending December 19. This was unlike the inflows of the previous week, where the institutional purchasing interest was on the decline.
The outflows of the Bitcoin Trust (iShares) totalled $240.3 million, the outflows of the Bitcoin ETF (Bitwise) totalled $ 115.1 million, and the outflows of the Bitcoin ETF (ARK) totalled $100.7 million. The Fidelity Wise Origin Bitcoin Fund (FBTC) was the only fund with net inflows, totalling $33.1 million. Eleven US BTC-spot ETF issuers have reported redemptions in the week.
Net outflows in December have totalled $298.2 million. In November, the amount was $3.47 billion, which facilitated a 17.42% decline in Bitcoin prices during the same month. The ETF market continues to play a key role in the supply and demand of BTC.
Also Read: Bitcoin Price Rebounds to $91,323 on Hopes of Federal Reserve Rate Cuts
The 50-day and 200-day Exponential Moving Averages are currently below Bitcoin, indicating the charts remain bearish. A breakout of above $94,447 can alter that trend. By breaking above the 50-day EMA, BTC can reach the $100,000 resistance zone.
BTC needs to be supported at the $80,000 level to sustain its short- to mid-term bullish structure. Recovery opportunities could change if the price falls below $80,523. Investors are still awaiting further direction, with continued monitoring of macroeconomic indicators, Federal Reserve commentary, and ETF activity.
