Bitcoin briefly dipped below $94,000 earlier this week, but recovered strongly and stabilized around $100,000 by Friday. Despite the mixed sentiment this week, institutional demand remained strong, adding $1.72 billion through Thursday. The chief operating officer (COO) of Indian crypto exchange Giotto Strude FXStreet said the financial incentive for investors is to help companies add Bitcoin to their balance sheets. .
After a recent decline earlier this week, Bitcoin (BTC) regained the $100,000 level on Friday, trading near $100,100. The recent decline in BTC is mainly due to highly leveraged traders and some holders taking profits. Despite Microsoft's refusal to add Bitcoin to its balance sheet, demand from institutional investors remains strong, with total inflows of $1.72 billion through Thursday. Giottus COO Arjun Vijay emphasized that there is a growing economic incentive for companies to include Bitcoin on their balance sheets.
Bitcoin reaction this week
Bitcoin price started the week on a down note, dropping 3.49% and hitting a low of $94,150 on Monday. According to data from CoinGlass, this decline triggered a wave of liquidations across the crypto market, resulting in over 562,801 traders being liquidated and a total of over $1.69 billion, especially $180 million in BTC. The above amount has been cleared.
Analysts at K33 say the recent surge above 100,000 led traders to “pile up leveraged longs, but were quickly punished as prices reversed in liquidation cascades.”
Apart from leverage, Santiment's network realized profit and loss (NPL) shows that some holders booked profits on Monday. The non-performing loan index jumped nearly eightfold from Sunday to Monday, from 743.2 million to 5.95 billion. This increase indicates that holders were taking profits on average.
Bitcoin network realized profit and loss chart. Source: Santiment
Monday's Bitcoin liquidation was compounded by Tuesday's announcement that Microsoft's shareholders rejected a proposal to add Bitcoin to the company's balance sheet, causing Bitcoin's price to fall further.
This proposal suggested that BTC could act as a hedge against inflation. However, Microsoft's board of directors opposed the idea, citing the unpredictable price fluctuations of cryptocurrencies and a preference to stick to existing investment strategies.
Arjun Vijay, Chief Operating Officer and Founder of Indian crypto exchange Giottus, shared insights on this matter with FXStreet in an exclusive interview. Mr. Vijay asserts that MicroStrategy has done very well with Bitcoin on its balance sheet, and other companies like Metaplanet have followed suit.
Mr. Vijay acknowledged that there are financial incentives for investors to support adding Bitcoin to corporate balance sheets. I think the same can be said for corporations. You don't usually win on the first try, so Microsoft will probably be asked this question six months from now, a year from now, two years from now. ” says Mr.
Mr. Vijay asked why at least 10,000 publicly traded companies around the world didn't invest in Bitcoin when it was at the $100,000 milestone, facing a similar situation as Microsoft did with its shareholders. I am sure that you will be faced with the question: The executive believes that U.S. politics is important to these developments.
According to a report by the National Center for Public Policy Research, adoption of BTC at the corporate level is becoming more mainstream, with companies like Amazon shareholders turning to Bitcoin as a reserve asset to beat inflation and increase shareholder value. The company is reportedly asking the company to consider investing in the company. (NCPPR). This move is heavily influenced by MicroStrategy’s aggressive BTC accumulation, which has purchased 423,650 BTC since 2020.
Around the same time, Google's announcement of its latest quantum chip, Willow, raised concerns about the potential for compromising the integrity of Bitcoin and crypto-encryption networks.
The event stimulated discussion about the need for quantum-resistant cryptography and highlighted the urgency for the cryptographic community to address vulnerabilities posed by advances in quantum technology.
“With 105 qubits, Google's Willow chip delivered unprecedented computational power, solving problems in minutes that would take traditional supercomputers billions of years. , experts agree that Willow's current capabilities do not pose an imminent threat to Bitcoin's cryptographic security,” Ryan Lee, principal analyst at Bitget Research, told FXStreet.
On Wednesday, the US November consumer price index (CPI) met expectations at 2.7%, boosting investor optimism that the Federal Reserve may announce a 25 basis points (bps) As a result, Bitcoin soared past the $100,000 milestone and closed at $100,444. A rate cut could occur at a future meeting.
“One is that the U.S. is cutting interest rates. Rate cuts are generally pretty good for risk assets. Trump is coming. Elon Musk will join President Trump in forming a government. 2025 could be the year of cryptocurrencies and we are witnessing history,” said Geotas's Vijay.
Despite these mixed sentiments this week, institutional demand remained strong. Bitcoin spot exchange-traded fund (ETF) data recorded total inflows of $1.72 billion through Thursday, according to Coinglass. If this inflow trend persists or accelerates, it could provide further momentum to the ongoing Bitcoin price rally.
Total Bitcoin Spot ETF Net Inflows Chart. Source: Coinglass
Bitcoin was steady near $100,100 on Friday, with MicroStrategy (MSTR) anticipating potential news of its inclusion in the Nasdaq 100 index, fueling market interest.
Analysts at K33 wrote: “The rise in the stock price will allow MicroStrategy to continue its BTC acquisition strategy, which could attract significant capital inflows from index-tracking funds, boosting both MicroStrategy’s stock price and BTC price.” states.
Bitcoin technical outlook
Bitcoin price bounced back to daily resistance at $101,109 on Thursday, down 1.11%. As of this writing on Friday, it has recovered slightly and is trading at around $100,000.
If the $101,109 level continues as resistance, BTC could extend the decline to retest the psychologically important level of $90,000.
The Relative Strength Index (RSI) on the daily chart is at 61, negating Sunday's overbought level of 70 and showing signs of weakness. Additionally, if the RSI closes each day below the neutral level of 50, it generally indicates increasing bearish momentum, leading to further declines in Bitcoin price.
BTC/USDT daily chart
On the other hand, if BTC continues its recovery and closes above $104,088, it could extend the rally towards an all-time high of $119,510. This level coincides with the 141.4% Fibonacci extension from the November 4th low of $66,835 to the December 5th all-time high of $104,088.
Frequently asked questions about Bitcoin, altcoins, and stablecoins
Bitcoin is the largest cryptocurrency by market capitalization and is a virtual currency designed to function as money. This form of payment is not controlled by any particular person, group, or entity and eliminates the need for third parties to participate during financial transactions.
An altcoin is any cryptocurrency other than Bitcoin, but some consider Ethereum to be a non-altcoin because it is these two cryptocurrencies that forks occur. If this is true, Litecoin would be the first altcoin to fork from the Bitcoin protocol and thus be an “improved” version of it.
A stablecoin is a cryptocurrency that is designed to have a stable price, and its value is backed by the reserves of the asset it represents. To achieve this, the value of a stablecoin is pegged to a commodity or financial instrument, such as the US dollar (USD), and its supply is regulated by an algorithm or demand. The main purpose of stablecoins is to provide an on/off ramp for investors who wish to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value, as cryptocurrencies are generally volatile.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the market capitalization of all cryptocurrencies combined. This clearly shows the interest in Bitcoin among investors. BTC's dominance typically occurs around bull markets, where investors turn to relatively stable, high-market-cap cryptocurrencies like Bitcoin. Decreasing BTC dominance usually means investors are moving their capital and profits to altcoins in search of higher returns, which usually causes an explosive rally in altcoins.
