Key Points
- Bitcoin’s [BTC] demand in the U.S has rebounded, as indicated by the Coinbase Premium Index.
- Lower liquidity levels could potentially confine BTC within a specific price range.
On 03 January, Bitcoin [BTC] experienced a surge, almost reaching $99k. This surge followed a rebound in demand from the U.S, as shown by the Coinbase Premium Index. The index had recently hit a 12-month low due to a risk-off approach adopted by U.S retail and institutional investors over the holiday period.
The index was also able to reclaim the crucial 14-day Simple Moving Average (SMA) for the first time in nearly four weeks. CryptoQuant analyst Burak Kesmeci stated that this signifies a larger dominance of U.S buyers in the market.
Bitcoin ETFs and Liquidity Levels
This trend was not only evident in the U.S BTC market but also in the U.S BTC ETFs complex. They reported $908M in daily net inflows on Friday, marking a monthly high.
BlackRock’s IBIT, which started the year with outflows, reported $253M in inflows on Friday. Fidelity’s FBTC led the demand with $357M and Ark Invest’s ARKB came in third with $222M inflows. This suggests that institutional demand is back and has helped BTC’s steady push to $98.9k.
Furthermore, the extended recovery was propelled by a liquidity hunt as a significant amount of short positions was situated at the $98k-level earlier in the week. Currently, the upside liquidity is situated between $99k and $100k.
Lower liquidity levels seemed to be situated at $97.2k, $96k, and $95k. Given that more liquidity seems to be concentrated on the lower side of the price action at press time, a drop towards $97K-$95K can’t be ruled out.
The liquidation heatmap suggests that BTC could enter a price range between $96k and $100k in the short term. However, it remains uncertain whether strong BTC ETF demand will trigger a bullish breakout above $100k.
