3 key factors shaping Bitcoin price trends in the near future

Bitcoin-based investment products are facing pressure as capital inflows decline, while demand from institutional investors has weakened compared to earlier this year.

With institutional inflows nearly dried up, the market seems to be signaling that, despite expectations of rate cuts and positive regulatory developments, Bitcoin’s rally may be nearing its limits. In this analysis, we’ll review three key factors that could drive BTC prices, while highlighting important price levels to watch in the coming week.

Bitcoin’s Three Main Catalysts

Bitcoin investors are tracking three critical factors to forecast the next wave of BTC’s price rally: inflows from US Bitcoin ETFs, Bitcoin’s market dominance, and the realized profit/loss situation recorded by traders.

Institutional Flows

Bitcoin’s price surge has been strongly driven by institutional inflows into US ETFs. Giants like Strategy (formerly MicroStrategy) have continuously added Bitcoin to their balance sheets, inspiring many other corporations to enter the market. Demand from these institutions has helped push Bitcoin past the $100,000 mark and even reach record highs above $126,000.

Bitcoin ETF Flows | Source: FarsideHowever, as the “big players” pull back and institutional demand wanes, Bitcoin struggles to hold above the critical $90,000 support. The $100,000 level, once a price anchor, has now become strong resistance; a convincing close above this could mark a promising return of the bull market.

Data from Farside shows Bitcoin ETF inflows are also declining: nearly $250 million has been withdrawn from these funds in December. As inflows shrink, indicators tracking Bitcoin’s strength and demand—like dominance—are also trending downward, reflecting a more cautious market phase.

Bitcoin Dominance Rate Drops, Signaling End of Bull Run?

Bitcoin’s dominance rate (BTC.D) reflects BTC’s influence compared to other altcoins in the market. As Bitcoin’s market cap fell to $1.79 trillion on December 6, the downtrend in dominance has become pronounced. Currently, BTC’s dominance has dropped below the 60% threshold, recorded at 59.31%.

Bitcoin Dominance Rate Daily Chart | Source: TradingViewOver the past two months, Bitcoin’s dominance has often hovered around 59%, and any growth in this index could become an important catalyst for BTC’s recovery. Conversely, a drop in dominance often signals the end of a bull cycle, while creating opportunities for capital to flow into altcoins and other tokens in the market.

Traders Selling Bitcoin at a Loss

If there’s one indicator that truly reflects the market’s state, it’s the Realized Profit/Loss on the network. Santiment’s on-chain index tracks the net realized profit and loss that traders lock in each day. For several days in November and December, data shows many traders are cutting their losses—a warning signal of capitulation or increasing selling pressure on Bitcoin.

Bitcoin Realized Profit/Loss | Source: SantimentStrong negative peaks in this index often precede major changes in price trends. As profit-taking turns into realized losses, traders are under pressure from their Bitcoin holdings, leading them to expect lower BTC prices.

If this trend of large-scale realized losses continues, negative impacts on Bitcoin’s price in the coming weeks are almost inevitable. In addition, macroeconomic factors and expectations of rate cuts also play a key role in shaping price action.

Bitcoin Price Analysis: Key Levels to Watch

Bitcoin is currently holding above the important support at $83,828, providing a solid base for its next move on the price chart. Two notable resistance levels are R1 at $91,361 and R2 at $98,019, while the $100,000 mark remains a key barrier, drawing the full attention of investors.

BTC/USDT Daily Chart | Source: TradingViewAfter more than two weeks of consolidation, Bitcoin has yet to determine its next direction—whether it will bounce higher or continue correcting. Momentum indicators on the BTC/USDT daily chart show positive signals: RSI is at 43, heading toward the neutral zone, and MACD is recording consecutive green histogram bars, indicating strength in the uptrend.

If Bitcoin can close a daily candle above R2, the three exponential moving averages (20-, 50-, and 100-day EMA) will act as important support, reinforcing the upward momentum. Conversely, a correction could still occur, in which case Bitcoin may retest the $83,000 support level.

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