How Bitcoin’s ‘quick reset’ after $19bn flash crash sets stage for new highs this year

How Bitcoin’s ‘quick reset’ after $19bn flash crash sets stage for new highs this year
MarketsSnapshot
Structural demand for Bitcoin remains strong, analysts point out. Illustration: Gwen P; Source: Shutterstock
  • Analysts say structural demand remains strong even as geopolitical and macro risks loom.
  • ETFs see significant positive flows.

Buoyed by continued institutional investment, Bitcoin is clawing its way back from one of the largest liquidation events in the industry’s history.

And according to Kyle Chassé, founder of venture capital firm MV Global, the $2.2 billion asset is even on track for new highs this year.

It “may take a week or two for markets and order books to return to equilibrium, but they’ll recover and continue to exceed all-time highs,” he told DL News.

With spot exchange-traded funds “pulling coins off the market,” he added, “institutions are now the steady bid.”

Over the past two weeks, Bitcoin ETFs have still attracted $5.7 billion in net inflows, according to data collected from SoSoValue.

“Black Friday just reminded everyone how Bitcoin trades: quick sell-off, quick reset.”

And Chassé is not the only optimistic voice.

Seasonal tailwinds

Farzam Ehsani, CEO of crypto trading platform VALR, pointed out that despite the steep crash, liquidity did not completely exit the crypto markets.

Ehsani noted that stablecoin liquidity also crossed $300 billion in circulating supply.

“Together, these indicate that money is staying within the crypto ecosystem, a constructive signal if the market recovers as it did after past washouts like 2020,” he said.

Bitcoin's price whipsawed over the past week. Source: DefiLlama.

Ehsani added that the interplay between easing monetary policy and renewed trade tensions continues to define Bitcoin’s near-term trajectory.

Historically, the year’s fourth quarter has been a favourable season for crypto, he said.

“This time, the market faces a complex backdrop where geopolitical uncertainty and global trade dynamics could easily override seasonal tailwinds.”

Crypto market movers

  • Bitcoin is down 2% over the past 24 hours to trade at $110,886.
  • Ethereum is down 4.3% over the past 24 hours, trading at $4,002.

What we’re reading

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email lance@dlnews.com.

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