Bitcoin (BTC) wrapped up the week at approximately $63,100, marking a notable 22% surge from the previous week’s closing price of around $51,725. The week witnessed vigorous price action, particularly in the first half, as BTC experienced a substantial appreciation from Monday to Wednesday, peaking at $64,000 on Wednesday. Subsequently, the price stabilized in the latter half of the week, closing at about $63,100. As of the time of this writing, BTC has regained momentum and is currently trading above $65,000.

The BTC Spot ETFs continue to exhibit strong momentum, with a cumulative net inflow of approximately $1.7 billion recorded last week, bringing the total net inflow since inception to about $7.4 billion. Leading the race is the Blackrock Bitcoin ETF (IBIT), which surpassed $10 billion in assets under management (AUM) last week, setting a record as the fastest ETF in history to achieve this AUM milestone.

Trading volumes for BTC Spot ETFs saw a significant surge during the week, totalling $22.3 billion, with an average daily trading volume of almost $4.5 billion. This marked a remarkable 265% increase from the average daily trading volume of $1.7 billion recorded since inception. The cumulative trading volume now exceeds $73.9 billion, with the daily average volume surpassing $2 billion, currently standing at $2.1 billion.

Similarly, trading volume surged on centralized digital assets exchanges, reaching a cumulative trading volume of $73.4 billion for the week. This represents an 80% increase from the previous week’s volume of $40.7 billion and marks the highest weekly trading volume recorded since May 2022. The data underscores the recent price appreciation accompanied by robust trading activity.

The rise in open interest, which represents the total number of outstanding derivative contracts for an asset that have not been settled, is observed both for BTC and the digital assets market in general, across both centralized digital assets exchanges (e.g., Binance, Coinbase, ByBit, etc.) and traditional finance investors’ platforms (e.g., CME). This indicates heightened activity from both digital assets native and traditional finance investors.

The strong momentum extends beyond Bitcoin to the overall market, with the total digital assets market cap currently standing at $2.5 trillion, approaching the all-time high of $3 trillion. Notably, the Total3 metric, which excludes Bitcoin (BTC) and Ethereum (ETH) and represents the market cap of the top 125 capitalised digital assets, has surged to $660 billion, reflecting a 19.3% growth week-on-week and a 31.5% year-to-date increase. This underscores the broad impact of BTC Spot ETFs on market momentum beyond BTC’s price action.

Examining the total stablecoin supply also provides insights into heightened demand. During periods of low demand, the supply of stablecoins typically decreases as investors exchange them for fiat currencies like USD, GBP, or EUR, thereby reducing the overall circulating supply. Conversely, during phases of increased liquidity injection into the market, the supply of stablecoins tends to expand. Presently, the total stablecoin supply stands at approximately $145 billion, reflecting a continuous uptrend from around $129 billion noted at the end of September 2023. This confirms sustained strong investor demand observed throughout Q4 2023 and into Q1 2024.

Bitcoin (BTC) ended the week at approximately $52,150, showing a notable 7.9% increase from the previous week’s closing value of around $48,300. The week began with robust price growth, with BTC reaching its peak trading price of around $52,800 on Thursday, before stabilizing over the weekend within the $51,000 to $52,000 range and ultimately closing slightly above $52,000.

Last week marked Bitcoin’s return to trading above $50,000 for the first time in over two years, signaling strong momentum following the approval of BTC ETFs Spot. The last time BTC traded above $50,000 was back in December 2021, immediately following its all-time high of $69,000 in November of the same year. This period was retrospectively recognized as the onset of a significant downtrend that persisted throughout 2022, leading to a price decline to approximately $16,000 by the end of that year.

Market momentum continued to be fueled by the high demand for BTC ETFs Spot. Throughout last week, the cumulative net inflow into BTC ETFs totaled about $2.3 billion, nearly doubling the $1.2 billion recorded in the previous week, and accounting for almost half of the total net inflow since inception, which currently stands at roughly $5 billion.

Net inflows have remained consistently positive for 16 consecutive trading days since January 26th. However, outflows from the Grayscale Bitcoin ETF (GBTC) saw a slight increase last week, reaching approximately $625 million, marking a 50% rise compared to the cumulative outflow of $415 million recorded in the preceding week. This suggests an uptick in profit-taking by investors following the recent surge in BTC price.

Among the 9 ETFs launched on January 11th, Blackrock Bitcoin ETF (IBIT) maintains its lead with over $5 billion in assets under management (AUM), currently totaling around $6.2 billion. Fidelity BTC ETF (FBTC) follows in second place with approximately $4.5 billion AUM, while 21Shares & ARK Bitcoin ETF (ARKB) secures the third position with roughly $1.5 billion AUM. Last week, a fourth ETF crossed the $1 billion AUM milestone, with Bitwise Bitcoin ETF (BITB) reaching approximately $1.2 billion AUM.

Trading volume remained robust, with the cumulative trading volume of BTC ETFs reaching about $9.6 billion last week, boasting a daily average volume of over $1.9 billion. Since January 11th, the cumulative trading volume has totaled $45.3 billion, with an average daily volume of approximately $1.7 billion. These figures indicate above-average trading volume for the week, underlining strong buy pressure and activity surrounding these ETFs.

Analysing the macroeconomic landscape, the upcoming Federal Open Market Committee (FOMC) meeting is now 30 days away. Market expectations suggest a 90% probability of no change in rates, with the first 25bps cut still anticipated for some time between the end of Q2 and the beginning of Q3 this year. This expectation fuels the anticipation for a less restrictive monetary policy from the FED, increasing risk exposure that market participants are willing to undertake. This contributes to the robust momentum of risk assets such as BTC, cryptocurrencies, and stocks, with the S&P 500 recently achieving a new all-time high.

Bitcoin (BTC) concluded the week at approximately $41,400, reflecting a 5.5% decline compared to the previous week’s closing value of around $43,800. The price experienced a notable dip on Monday, reaching a weekly low of about $40,225 before staging a strong recovery and surpassing the $43,000 threshold on Wednesday and Thursday. Over the weekend, negative price movements brought the closing price to around $41,400, with the downtrend persisting into Monday the 18th, as BTC broke below the $41,000 trading level.

This past week marked the first instance of a weekly price decrease after eight consecutive weeks of price appreciation, signalling anticipated market movements aimed at reducing market leverage. Approximately $345 million worth of long and short positions were liquidated during the week, with the majority of liquidations affecting long positions, totalling around $235 million. However, the strong uptrend price movements witnessed at various points in the week also led to approximately $110 million in liquidation of short positions.

High volatility is a typical outcome following periods of significant uptrends and downtrends, triggering a cascade of liquidations that reduce market leverage and contribute to a more sustainable price action and market environment. Traders often capitalize on moments of heightened volatility to attract liquidity and readjust their positions.

Bitcoin dominance, representing its market capitalization relative to the entire digital asset market, declined to 53.11% from 53.46% the previous week, indicating the robust resilience of altcoins compared to the leading digital asset during the recent downtrend. This suggests active investor engagement, as this pattern typically occurs when investors swiftly allocate capital across various altcoins in search of short-term profitability.

An analysis of daily volume on centralized exchanges, measured over a 7-day period from the 11th to the 17th of November, revealed a daily volume exceeding $36 billion. This represents the highest level recorded since March 2023, affirming strong trading activity that contributes to increased volatility.

Looking at the ETFs topic, the Grayscale Bitcoin Trust (GBTC) discount and Grayscale Ethereum Trust (ETHE) maintain a stable discount, standing at 9.9% and 13.7%, respectively. This underscores the unchanged confidence among investors regarding the likelihood of ETF spot approval and the subsequent conversion of Grayscale trusts to ETFs.

The final deadline for the SEC decision on the 21Shares BTC Spot Filing is scheduled for the 10th of January, with the comment window closing on the 5th of January. The 6-day window from the 5th to the 10th of January is when the SEC is expected to provide a final approval or rejection for the 21Shares filing, coinciding with a cascade of approvals or rejections for other BTC filings. Analysts continue to predict a 90% probability of receiving a green light from the SEC.