The market for cryptocurrency has been a hive of activity, and demand for Bitcoin (BTC) is proving to be very robust, with net outflows from exchanges hitting an astonishing $800 million this week. This is a noticeable trend as the amount of BTC available on centralized exchanges (CEXs) continues to drop. HODLers are still HODLing, and we are seeing a shift to an even more favorable supply-and-demand picture for BTC, with long-term holders clearly becoming more and more reluctant to sell their coins. BTC recorded $800M in net outflows from exchanges this week, showing demand is still strong as supply available on CEXs continues to decrease pic.twitter.com/6raOgFV0Q1 — IntoTheBlock (@intotheblock) January 25, 2025 Hodler Selling and the Rise of Bitcoin Dominance A large part of this story is the long-term holders of Bitcoin selling, especially after Donald Trump was elected in November 2024. Since then, they have moved an estimated 500,000 BTC, worth around $50 billion, from their addresses. The good part of this trend is that it seems to indicate a slowdown in selling activity. And what’s good about that is that it aligns with a growing sentiment that Bitcoin is once again primed for further upward momentum. Hodler selling accelerated since Trump's election, with 500k BTC (~$50B) leaving long-term holders' addresses since November pic.twitter.com/xcpmBFwSHe — IntoTheBlock (@intotheblock) January 24, 2025 The metric that tracks BTC’s share of the total cryptocurrency market, called Bitcoin dominance, is again on the upswing. After hitting an approximate low of 54% in December 2024, BTC dominance has surged back above 57% in January 2025, signaling a renewed interest in what is still the leading cryptocurrency. This behavior, in which BTC dominance casts a shadow well over $1 trillion, echoes what happened in the 2020 cycle, in which Bitcoin’s price also saw a wall-to-wall significant rally. Back then, BTC dominance bottomed out at around 60% in November 2020 before rallying to 69% in January 2021. #Bitcoin dominance is climbing again. After bottoming in December 2024 at ~54%, #BTC dominance has surged past 57% in January 2025. This mirrors the 2020 cycle, where $BTC dominance bottomed in Nov '20 (~60%), then rallied to 69% in Jan '21 before its decline:… pic.twitter.com/ekqfdoIach — glassnode (@glassnode) January 24, 2025 The current market dynamics are best understood in relation to the dominance of Bitcoin and its price. In the last cycle, as the price of BTC began to increase, dominance began to decrease. This decrease signaled not just a shift in the price of Bitcoin but also a shift in what investors were interested in purchasing. After the price of Bitcoin had reached new highs, investors appeared to have resumed moving toward riskier assets—the next-high-altcoin or whatever else promises strong returns when the market is believed to be bullish—after allegedly having crowdsourced the safety of the appearing-to-be stable, first-in-market asset. Key Support Level and the Spot ETF Inflows To keep its bullish price momentum, Bitcoin must hold above some key support levels. One of those is $97,877, where more than 101,000 BTC were amassed. Holding this level, the analysts say, is crucial for keeping the kind of “upward price pressure” on Bitcoin that has the potential to take it where it wants to go—up. The key support level for #Bitcoin is at $97,877, where more than 101,000 $BTC were accumulated. Holding above this level is crucial to sustaining the bullish momentum. pic.twitter.com/4kMR5ZtkWa — Ali (@ali_charts) January 25, 2025 On January 24, significant institutional interest was directed toward Bitcoin. For the seventh consecutive day, Bitcoin spot exchange-traded funds (ETFs) saw inflows, amassing a net total of $518 million over that time. One of the main drivers behind that surge in interest was Fidelity’s Bitcoin ETF (FBTC), which alone saw a net inflow of $186 million. And by the time January 24 rolled around, the Bitcoin spot ETFs overall had a net asset value of an impressive $123.058 billion. The current state of affairs for the dominance of Bitcoin, along with the inflows of capital into Bitcoin ETFs, tells us that institutional investors are making some big bets on this leading digital asset. They’re betting on not just the sustained outperformance of Bitcoin but also its potential to become a go-to asset in times of crisis, which is what it looks set to become given the uncertain shape of international markets at the moment. On January 24, the total net inflow of Bitcoin spot ETF was $518 million, with net inflow for 7 consecutive days. The inflow of Fidelity ETF FBTC was $186 million. The current total net asset value of Bitcoin spot ETF is $123.058 billion. https://t.co/59u0BnEqLG pic.twitter.com/ykhS8zZR5p — Wu Blockchain (@WuBlockchain) January 25, 2025 What’s Next for Bitcoin? Bitcoin’s rising dominance, ongoing institutional inflows, and dwindling exchange supply leave the cryptocurrency’s current outlook hard to dispute: it’s bullish. But there’s another reason for optimism, one that takes us to the end of 2024 and beyond. In addition, this asset’s sustained growth in the popularity of Bitcoin ETFs provides yet another support layer. The price of Bitcoin may keep enjoying the continued benefit of a steady stream of institutional capital as more people invest in these vehicles. Most people seem to believe that the price of Bitcoin will keep going up, but few if any, prices are set without some sort of “support level” being in place. Markets seem to be eyeing the $97,877 mark as a support level, and if Bitcoin can hold above that price, it’s “probably” going to keep moving up. To sum up, Bitcoin is reiterating its vigor as a market leader. The mixture of a blow-up in its dominance, a growing interest from institutions, and a supply that is all but nonexistent on exchanges makes the prospect of further price appreciation seem quite likely. Should the crucial support levels hold and inflows from institutions continue, it seems quite probable that we will see a new all-time high in 2025. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news !
