Wow Bitcoin hit $106k for the first time!

Bitcoins future price:

Coinglass data shows a total net inflow of $2.17 billion last week, and if this trend continues, it could push Bitcoin prices higher.

Bitcoin's price fell on Monday after hitting a new all-time high of $106,648 earlier in the Asian trading session. The focus this week is on the US Federal Reserve's (Fed) decision on interest rates, expected on Wednesday. The central bank is anticipated to cut rates, which could benefit risk assets like Bitcoin. However, the Fed might also signal fewer rate cuts than previously expected for 2025, which could affect Bitcoin's appeal to investors.

The recent surge to the new all-time high was supported by strong inflows into US Bitcoin Spot Exchange Traded Funds (ETFs), totaling $2.17 billion last week. Despite this bullish activity, technical indicators such as the Relative Strength Index (RSI) and Awesome Oscillator (AO) show early signs of bearish divergence, indicating that the upward momentum might be slowing.

Bitcoin's rally last week, where it increased by 3.2%, has set the stage for further gains if the Fed's decision is favorable. According to the CME’s Fed watch tool, there is a 97.1% chance of a 25 basis point cut, which could stimulate the economy and benefit Bitcoin. However, if the Fed projects fewer rate cuts for 2025, this could strengthen Treasury yields and the US Dollar, making Bitcoin less attractive to investors.

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Institutional interest in Bitcoin remains strong, with significant inflows into Bitcoin Spot ETFs. Coinglass data shows a total net inflow of $2.17 billion last week, and if this trend continues, it could push Bitcoin prices higher. Additionally, Santiment data reveals a nearly 10% increase in wallets holding at least 100 BTC since the start of the bull rally on October 10, indicating growing investor confidence.

Despite the positive trends, traders should remain cautious. Darius Sit, Founder and Chief Investment Officer of QCP Singapore, expressed a very bullish outlook on Bitcoin, citing a liquidity rush into Bitcoin from traditional markets. However, he also warned of potential volatility due to leverage overheating, as indicated by CryptoQuant data showing the Estimated Leverage Ratio (ELR) at annual highs. This suggests a possible correction could occur if leverage levels become unsustainable.