Crypto Today: Bitcoin, Ethereum, XRP hold steady as ETF inflows strengthen short-term bullish outlook

Rising ETF demand fuels broad recovery in BTC, ETH and XRP

Bitcoin spot Exchange Traded Funds (ETFs) recorded the highest single-day inflow of $753 million since October on Tuesday. The surge was largely driven by an overall improvement in sentiment following the United States Bureau of Labor Statistics (BLS) report of softer-than-expected core inflation.

The cumulative inflow now stands at $57.27 billion with net assets at $123 billion. None of the nine spot BTC ETFs experienced outflows. Fidelity’s FBTC led with approximately $351 million in inflows, followed by Bitwise’s BITB with $159 million and BlackRock’s IBIT with $126 million.

Ethereum spot ETFs extended their inflow streak for the second consecutive day, recording approximately $130 million on Tuesday. BlackRock’s ETHA ETF led with inflows of $53 million, followed by Grayscale’s ETH with $35 million and Bitwise’s ETHW with approximately $23 million. The cumulative inflow now stands at $12.57 billion with net assets at $19.62 billion.

Meanwhile, interest in XRP spot ETFs continues to build, as SoSoValue reports nearly $13 million in inflows on Tuesday. Since their launch in November, XRP ETFs have recorded just one outflow, totaling $41 million on January 7. The cumulative inflow now stands at $1.25 billion with net assets at $1.54 billion.

Chart of the day: Can Bitcoin sustain its uptrend?

Bitcoin is holding above $95,000 at the time of writing on Wednesday, following a sharp increase from the previous day’s open of $91,296 to a high of $96,495. The Moving Average Convergence Divergence (MACD) indicator on the daily chart remains in a buy signal triggered on December 21, suggesting that bullish momentum could expand further.

The green histogram above the mean line may prompt investors to lean more into risk, contributing to the tailwind and increasing the odds of a larger breakout toward $100,000.

A close above the 100-day Exponential Moving Average (EMA) at $95,987 would confirm BTC’s short-term bullish outlook. Still, more resistance is expected at the 200-day EMA at $99,581.

Bitcoin could also lag the breakout, as the Relative Strength Index (RSI) stands at 65 and is correcting from its recent high. If the RSI declines toward the 50 midline, the path of least resistance will likely flip downward, as Bitcoin resumes its correction toward $90,000.

Altcoins update: Ethereum eyes breakout as XRP consolidates

Ethereum is trading above $3,300 at the time of writing on Wednesday, with the 100-day EMA providing support at $3,288. The MACD indicator remains above the signal line on the daily chart, with green histogram bars above the zero line, expanding in support of the bullish thesis.

Still, a break above the immediate 200-day EMA resistance at $3,339 is required to reinforce the bullish grip. A close above this moving average could accelerate Ethereum to the next key hurdle at $3,447, tested on December 10.

Meanwhile, the RSI on the same daily chart has stabilised at 65, signaling potential consolidation. A resumption of the RSI uptrend would support the short-term bullish outlook, while a decline would increase the chances of Ethereum trimming its value toward $3,000.

As for XRP, the price holds below the 100-day Exponential Moving Average (EMA) at $2.21and the 200-day EMA at 2.33, but remains above support provided by the 50-day EMA at $2.08 at the time of writing on Wednesday.

The RSI has dropped slightly to 57 on the daily chart, indicating that sellers still have the upper hand. XRP will likely retest the 50-day EMA if the RSI extends its decline.

Meanwhile, the MACD indicator on the same chart highlights a slight positive divergence, which could prompt traders to increase risk exposure, adding to the tailwind. However, a break above the 100-day EMA at $2.21 would be required to support a 5% increase to the 200-day EMA at $2.33.

Crypto ETF FAQs

What is an ETF?

An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.

Is Bitcoin futures ETF approved?

Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.

Is Bitcoin spot ETF approved?

Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.

Which are the pros and cons of crypto ETFs?

The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.

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