The Cryptocurrency Market Paused After Rallying

The cryptocurrency market is down 0.5% in 24 hours to $3.08 trillion. The market has paused after rallying since the end of last week.

The cryptocurrency market is pausing after rallying since the end of last week. The total cryptocurrency market cap fell by 0.4% over the past 24 hours to $3.08 trillion.

Cryptocurrency markets saw outflows of $6.3 million last week, pausing after four weeks of inflows that totalled $7.11 billion, according to CoinShares. Outflows from bitcoin were valued at $10.8 million, while outflows from solana reached $13.8 million. Inflows into ethereum amounted to $3.6 million, while XRP saw inflows of $11.3 million. Outflows from funds that allow bitcoin shorts reached $23.3 million, while outflows from funds with multiple crypto assets were valued at $32.8 million.

The cryptocurrency market sentiment index reached 90 for only the third time this year, according to the Deribit data. The sentiment was higher only at the end of 2020. This bullish sentiment confirms that traders are sticking to the four-year halving cycles. In 2020, price records attracted companies to buy the first currency in reserve to support market interest in equities. By 2024, even politicians seem to be scoring PR points by showing their commitment to bitcoin.

Bitcoin is trading at nearly $92K, up about 0.2% over the past 24 hours and showing little change from the 13th highs of $93.3K. A break above these highs would signal an entry into a growth extension with a target of $110K after a corrective pullback to 76.4% of the initial momentum. Such shallow corrections are typical of strong bull markets when buyers quickly return.

The Deribit bitcoin options skew reached 1.3% annualised, pausing after reaching lows of -34.2% on November 11th. A skew above 0 signals that traders are pricing in higher chances of gains than losses, while a skew below 0 signals the opposite. A positive skew tends to pause after reaching extremes, signalling a possible shift in sentiment.

One of the fractal analysis metrics signals a possible rise in bitcoin above $200K in the current cycle, noted BCA Research. The fractal analysis is used to identify patterns in financial markets and predict future price movements.

Bitcoin is now up about 1.3% so far in November after rising to a new record high of $93,388 on the 13th. The world's largest cryptocurrency began the year 2022 at around $46,644.

According to Blockworks, Bernstein expects key catalysts in 2025 to push bitcoin towards the $200K target level. These include the appointment of a new SEC chairman and treasury secretary, regulatory easing, progress on creating a US strategic bitcoin reserve, creating a powerhouse for BTC mining in the US, and creating a regulatory framework for stablecoins. Another driver will be coin purchases in ETFs, as well as by miners and companies such as MicroStrategy.

MicroStrategy purchased an additional 51,780 BTC (~$4.6 billion) from the 11th to the 17th of November, according to a filing with the SEC. The business intelligence company used proceeds from the issuance and sale of shares to fund the bitcoin purchases. The average purchase price was approximately $88,627. MicroStrategy now reserves 331,200 BTC at an average price of $49,874 per coin.

Solana reached a peak of over $245 in December 2021, setting a new record for daily fees paid by users on the blockchain. The return of meme coin hype fuelled high network activity, evidenced by a 1-minute block time and 200K TPS throughout the day. Solana is currently trading at $234, down about 0.4% over the past 24 hours and showing little change from a low of $192 on November 11th.