Bitcoin and Ethereum are seeing inflows of over $19.7 billion, an echo of the past bull market

Bitcoin is signaling the start of a new uptrend, rallying to $42.6K after a recent sell-off driven primarily by short-term holders (STHs), who represent the more speculative segment of the Bitcoin investor base . Ether also experienced an upswing and exceeded the $2,270 mark alongside the world's largest cryptocurrency.

Against this backdrop, significant capital inflows have been observed into Bitcoin and Ether, which could further influence the price development of these top assets.

Bitcoin and Ethereum are attracting massive inflows

According to popular on-chain analyst Ali Martinez, December 14 saw an inflow of over $19.7 billion into Bitcoin and Ethereum. The number was reminiscent of the capital inflow exactly three years ago, just before Bitcoin rose from $18,000 to $65,000.

If historical patterns repeat themselves, Bitcoin could potentially follow a similar path to the 2020 cycle and reach new highs.

Additionally, Greek.live revealed that BTC options had the upper hand amid the new rally mid-week, accounting for 50% of the total options volume.

Notably, 50% of block trades actively purchased DEC29 calls. Although expiry option IV was well below average on December 29, a giant whale chose to go long in the bullish market at the end of the year.

Bullish outlook

As part of the latest series of bullish Bitcoin price predictions, another market commentator speculated that the asset is expected to surpass the $42,000-$45,000 range by the end of next week. From this point on, no significant hurdles are expected until it reaches $63,000.

Bitcoin's strong rally was halted after short-term holders dumped their holdings due to profit-taking. This triggered the third-largest sell-off of 2023. Glassnode's analysis found that the leading cryptocurrency was experiencing short-term exhaustion after rising to a yearly high of $44.5K.

However, the shrinking BTC supply on crypto exchanges reflected investor sentiment to hold on to their assets and a lower willingness to sell.

Meanwhile, Arthur Hayes, the former CEO of the BitMEX exchange, also reiterated his previous prediction that Bitcoin would eventually reach $1 million, attributing this to the broader economic changes that are eroding the value of national currencies.

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