5 min readBitcoin is holding steady around 87k on Wednesday, following losses earlier in the week amid sustained ETF outflows and uncertainty over the Federal Reserve’s future interest-rate path, keeping sentiment cautious.
Bitcoin is down just 0.3% over the past 24 hours and 5% over the past seven days, while Ethereum is unchanged today but is 12% lower over the past week. The total cryptocurrency market capitalization is 0.3% lower at $2.96 trillion, down from $3.21 trillion a week ago.
The mood in the crypto market remains cautious as investors weigh up recent data to assess the Federal Reserve’s future path for interest rates. Yesterday, US jobs data painted a mixed picture. The economy added 64k jobs in November, down from 119k in September but ahead of the 50k forecast. Meanwhile, the unemployment rate unexpectedly rose to 4.6%, its highest level since 2021.
The data suggest that the labour market is cooling, but not sufficiently to provide the Federal Reserve with a clear signal that further rate cuts are warranted. The data complicated the picture surrounding the Federal Reserve’s next move as policymakers balance a weakening labor market against sticky inflation.
US CPI data are due tomorrow and are expected to show that inflation remained unchanged at 3% YoY in November, still well above the 2% target.
BTC ETF outflows & LTHs sell pressure
In addition to an uncertain macro backdrop, institutional outflows continue to pressurise BTC. Spot BTC ETFs recorded a further $277 million in net outflow on Tuesday, adding to net outflows of $357.7 million on Monday. Persistent institutional selling could pull BTC lower.
Meanwhile, prolonged sell-side pressure from long-term holders has continued to weigh on BTC. According to K33 2024 and 2025 are the second and third largest years for long-term supply reactivation in Bitcoin’s history, surpassed only by 2017. This could reflect direct selling into deep liquidity created by US BTC ETFs and corporate treasury demand. This would also explain BTC’s relative underperformance this year.
Ethereum Slips Below $3,000 as Network Activity and ETF Flows Weaken
Ethereum is edging 0.9% lower, trading below 300, having fallen 12% lower across the past 7 days. The selloff comes amid broad-based crypto weakness and as hopes fade for a year-end rally.
The number of weekly active addresses for Ethereum dropped sharply in December, falling from 440,000 to 324,000, marking the lowest level since May. The decline in active addresses also led to transaction volumes on the network falling to lows not seen since July.
The ongoing decrease in active addresses and transaction numbers suggests investors are staying on the sidelines. This lack of demand may lead to price declines or a sideways consolidation until network activity picks up again.
The trend in ETH ETFs confirms this. Ethereum ETFs experience significant outflows. According to SoSoValue data, ETH ETFs recorded approximately $510 million in outflows over the past four days, reflecting substantial institutional redemptions following net inflows last week.
Ethereum price forecast:
ETH recovered from the 2620 November low, before facing rejection at the 50 SMA and rebounding lower to 2950. Failure to retake the 50 SMA, combined with the RSI below 50, keeps sellers hopeful of further declines.
Sellers will look to extend the move lower to 2725, the December low, and the 78.6% Fib retracement of the 2110 low and 4955 high, and 2600, the November low. Below here, 2400 comes into focus ahead of 2110.
Buyers would need to rise above 3200, the 50 SMA, and the 61.8% Fib retracement. Above here, 3500, the 200 SMA and the 50% Fib level come into play.
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