Crypto Today: Bitcoin, Ethereum, XRP hold steady amid mild ETF inflows
- Bitcoin holds above $87,000 as bulls push for stability supported by ETF inflows.
- Ethereum edges lower on Wednesday, weighed down by two Death Cross patterns.
- XRP recovery loses steam below the 50-day EMA despite steady institutional interest.
Bitcoin (BTC) is trading above $87,000 at the time of writing on Wednesday, as bulls push for stability, following weeks of persistent declines. Altcoins, including Ethereum (ETH) and Ripple (XRP), are also holding steady above key support levels.
Recovery continuation this week will depend on institutional and retail demand as well as overall risk sentiment. However, investors must temper their bullish expectations, citing key hurdles and existing macroeconomic uncertainty.
Data spotlight: BTC, ETH, XRP show signs of stability backed by ETF inflows
Crypto Exchange Traded Funds (ETFs) listed in the United States (US) experienced inflows on Tuesday, reflecting improving risk appetite among institutional investors.
Bitcoin recorded ETF inflows, totaling $128 million on Tuesday, signaling a subtle return of institutional investors. Demand for crypto-related financial products, such as ETFs, had been low for weeks after the October 10 flash crash flopped, apart from a few days of inflows.
Macroeconomic uncertainty, concerns about the Federal Reserve's (Fed) December monetary policy decision, and a lack of conviction in the market's ability to sustain the recovery are among the factors contributing to the deteriorating outlook.
Institutional investors' behaviour in the coming days will help gauge the overall sentiment in the crypto market. Steady ETF inflows would reinforce the bullish outlook. Still, if ETF outflows resume, it will be an uphill task to sustain the recovery toward $90,000.
Ethereum ETFs, on the other hand, experienced their third consecutive day of inflows, with nearly $79 million recorded on Tuesday, $97 million on Monday, and $56 million on Friday.
Fidelity's FETH was the best-performing ETF, with almost $48 million in inflows, followed by BlackRock's ETHA with $46 million and Grayscale's ETH with approximately $8 million. The cumulative total net inflow volume as of Tuesday stands at $12.81 billion, with net assets averaging $18.26 billion.
The number of XRP ETFs trading in the US has reached four, including Canary Capital's XRPC, Bitwise's XRP, Grayscale's GXRP, and Franklin Templeton's XRPZ.
In total, XRP ETFs recorded approximately $35 million in inflows on Tuesday, bringing the cumulative net volume to $622 million and net assets to $645 million. The steady inflows indicate that institutional investors are paying attention to altcoin-based ETFs.
Chart of the day: Bitcoin traders under pressure
Bitcoin is showing signs of extending its decline below $87,000 after marking an intraday high of $88,224 on Wednesday. The largest crypto by market capitalization is below the 50-day Exponential Moving Average (EMA) at $101,171, the 200-day EMA at $105,618, and the 100-day EMA at $105,770, reinforcing bearish sentiment.
The Relative Strength Index (RSI) remains above the oversold threshold on the daily chart, indicating bearish momentum. If the RSI extends its decline, selling pressure may drive Bitcoin toward support at $80,600, which was tested on Friday.
Still, traders will watch for a potential buy signal from the Moving Average Convergence Divergence (MACD) indicator, which will manifest when the blue line crosses above the red line.
A daily close above $87,000 is required to affirm the subtle bullish outlook and increase the odds of Bitcoin lifting above $90,000.
Altcoins update: Ethereum, XRP edge lower
Ethereum is trimming gains toward its immediate support at $2,900. The daily chart shows a weak technical structure, characterized by two Death Cross patterns.
The first Death Cross pattern formed after the 50-day EMA crossed below the 100-day EMA in mid-November, while the second was confirmed on Tuesday with the same 50-day EMA crossing beneath the 200-day EMA.
Ethereum will likely trade under pressure, reflecting risk-off sentiment as investors lean bearishly.
Still, the MACD has issued a buy signal on the daily chart, suggesting investors increase their risk exposure. If demand increases and builds a strong tailwind, Ethereum may extend its recovery above $3,000.
XRP, on the other hand, is trading at around $2.18 at the time of writing on Wednesday, while staying below the falling 50-day EMA at $2.37, the 100-day EMA at $2.52 and the 200-day EMA also at $2.52 as they slope lower and continue to cap rebounds.
The MACD histogram turned slightly positive above the zero line, signaling a bullish crossover on the daily chart. A related buy signal was confirmed when the blue MACD line crossed above the red signal line, backing risk-on sentiment.
With RSI holding at 46 and declining, upward momentum could remain subdued, and the broader tone cautious.
On recovery, the 50-day EMA, the 200-day EMA and the 100-day EMA would present interim barriers ahead of a trend line that has been capping recovery since the record high of $3.66 in mid-July.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.
Nothing in this material constitutes investment advice, personal recommendation, investment research, an offer, or a solicitation to buy or sell any financial instrument. The content has been prepared without consideration of your individual investment objectives, financial situation, or needs, and should not be treated as such.
Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
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