Renowned crypto analyst Ali Martinez reported that capital inflow to the crypto market has decreased by more than 56% over the last month (i.e., December 2024). Investment volume dropped from $134 billion to $38 billion. In his post on X, Martinez shared a chart demonstrating the change in the total realized value of cryptocurrencies. A significant drop in inflow was observed from mid-December 2024 to early January 2025 following a successful November. Thus, the current decline was logically expected.
“This indicates a significant decrease in investment activity,” Martinez wrote.
The decrease in capital inflow may suggest that investors are less willing to invest in digital assets compared to previous months. As we see, this led to the so-called “consolidation phase” or “cooling off,” where asset prices decline.
Despite this, the net position of stablecoins remains stable, which may suggest that some investors feel more confident investing their funds in stablecoins.
According to data from CoinShares, $585 million was invested in crypto assets in the first three days of 2025. However, the last two days of 2024 ended with a net outflow of $75 million. Despite the decrease in activity at the end of the year, according to James Butterfill from CoinShares, the total investment volume in digital assets in 2024 reached a record level, nearly quadrupling the previous record from 2021.
Meanwhile, Bitcoin reserves on exchanges have dropped to a 7-year low. The volume of BTC on crypto exchanges decreased to 2.35 million as of January 13, which is the lowest since June 2018. This is likely due to institutional investors buying up coins.
According to Andre Dragosch from Bitwise, such a reduction in supply may signal an upcoming price increase due to a “supply shock.” At the same time, trading activity remains insufficient to reach the key resistance level of $100,000. The price even dropped to $90,199 during the day, reaching the lowest mark since November 18.
A sharp increase in bond yields and stronger-than-expected US employment data released last Friday led traders to pull back from risky assets and rethink bets on rapid cuts in interest rates by the US Federal Reserve (Fed). Goldman Sachs forecasts only two rate cuts in 2025, while Bank of America believes the pause could be longer.
FxPro’s chief market analyst Alex Kuptsikevich noted that the next possible mark for Bitcoin could be $88,000 if bearish sentiments continue to dominate. He also allows for a rapid fall to $74,000 if further pressure on the market persists.
