Inflows into cryptocurrency Investment products more than tripled last week, with the swift spike concentrated in Bitcoin as the world’s most popular crypto token headed for its strongest January performance in nearly a decade.
Investment in digital assets rose to $117 million, the largest amount since July 2022, digital asset management firm CoinShares said in a weekly update published Monday. The bulk of that amount—$116 million—was poured into Bitcoin.
Per Bloomberg, Hedge funds have loaded record high short position in the US treasuries ahead of the FOMC tomorrow- they expect yields to spike, DXY to surge and SPY to crash.
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A week earlier, inflows into Crypto products clocked in at $36 million, but 68% went into short-investment products or those that profit when the price of the underlying asset falls.
The funding wave accelerated as bitcoin’s price continued to rise from the start of 2023. This month through mid-Tuesday trade, the cryptocurrency has soared about 40%, putting it on track for its best January gain since 2013. It traded at around $23,125 earlier and currently at $22,900 as of Press time.
The inflows into short-bitcoin products were “minor” last week, at $4.4 million, CoinShares said. Bitcoin has been in recovery mode so far this year after its 64% plunge in 2022.
Speculators believe that bitcoin’s winter is over,” Naeem Aslam, chief market analyst at AvaTrade, said in a note late last week. At the same time, weakness in the US dollar as the Federal Reserve appears closer to pausing rate hikes has supported price gains for bitcoin and other cryptocurrencies, he said.
Total assets under management in investment products have risen 43% from their lows in November to $28 billion. Geographically, Germany last week drew in the highest inflow amount, with 40% at $46 million. Canada logged $30 million, the US pulled in $26 million, and Switzerland landed $23 million.
Bitcoin Price Forecast
BTC is facing resistance at $23.5k-$24.5k, Inverted Head and Shoulder pattern forming on weekly chart.
Bitcoin Price breaking out before OBV. Weekend pumps aren’t usually the most bullish and it’s worth noting OBV at resistance. As bullish as I am, I still want to make sure I’m not getting excited too early. Especially since stock futures aren’t out yet. Break above could result in significant price rise to $32k-$35k, but dip to $17k-$18k possible, keep an eye on strong support at $18.4k.