The Bitcoin price remains volatile in recent sessions, with recovery attempts struggling to gain traction. BTC is trying to stabilize after recent declines, but the demand from ETF investors is not always very strong.
Nevertheless, BlackRock emphasizes Bitcoin as an important long-term investment. This shows that the company has confidence, even amidst short-term fluctuations.
Bitcoin seems to be a BlackRock favorite
BlackRock has included its spot Bitcoin ETF as one of the three main investment themes for 2025. This choice primarily reflects long-term confidence, not just interest in short-term price movements. Despite Bitcoin showing significant price fluctuations this year, capital flows towards the ETF remain substantial.
Want more insights on tokens? Subscribe to the daily crypto newsletter from editor-in-chief Harsh Notariya here.
The year-to-date net inflow into BlackRock's Bitcoin ETF is approximately $29.6 billion. The total net inflow since its launch now amounts to $62.5 billion. These figures indicate sustained institutional interest. This also explains why BlackRock continues to mention Bitcoin in its strategic outlook, despite market volatility.
Bitcoin performs well in the futures market
In the short term, ETF trends show a different picture. Bitcoin ETFs experienced outflows on about half of the trading days last month. This suggests declining interest among some investors, especially those with a short-term view.
On Monday, Bitcoin ETFs collectively reported a net outflow of $142 million. This decline indicates uncertainty due to price volatility. While long-term capital remains in place, many investors are cautious in the short term and are waiting for clearer signals before increasing their positions.
Data on derivatives provides further insight into expectations. Despite spot demand being intermittent, the number of positions in perpetual futures is actually growing. When Bitcoin recently rose above $90,000, the perpetual open interest increased from 304,000 BTC to 310,000 BTC, an increase of about 2%.
The funding rate has also increased, from 0.04% to 0.09%. This combination means that more leveraged long positions are being opened again. Traders seem to be preparing for a potential movement at the end of the year. This shows that risk appetite is increasing, even though spot demand remains variable.
Rising open interest along with a higher funding rate generally indicates that optimism is growing. But it also means more sensitivity to fluctuations. If the price momentum decreases, leveraged positions can close quickly, causing short-term fluctuations to become even larger.
At the time of writing, Bitcoin is around $87,400, just below the resistance at $88,210. Based on the current technical structure, there is room for an upward attempt. If buyers defend the current level and the overall sentiment remains positive, short-term momentum may improve.
Seasonal factors can also influence the price. The trading week around Christmas typically leads to more inflows and less liquidity. If demand rises, Bitcoin could move towards $90,308, aided by leveraged positions and growing interest from investors.
There are still risks if the optimism does not continue. If Bitcoin drops below $86,247, the recovery pattern weakens. In that case, Bitcoin may fall towards $84,698. Such a drop invalidates the bullish expectation, leading to caution in the short term, despite support from institutional parties in the long term.
