Analyst: Bitcoin May See Short-Term Rebound, But Downside Risk Remains if Outflows Continue

BlockBeats News, December 28th. On-chain analyst Ali posted that after experiencing a prolonged downtrend, a short-term rebound in Bitcoin is possible, similar to the post-2021 market peak behavior. This could be a "dead cat bounce," with the price likely to fall again afterwards.

On-chain data shows a continued decrease in funds flowing into the cryptocurrency market, with the first instance of a negative net capital flow in nearly two years, now at - $4.5 billion. This means that funds are currently flowing out of the crypto market rather than flowing in.

Bitcoin ETFs have seen a net outflow of nearly $1 billion in the past two weeks. Any rebound observed in the market may be driven by leverage rather than spot demand, making such rallies prone to creating a "buy high, get trapped" situation, followed by a likely price decline. If funds continue to flow out of the market, the risk of price falling to even lower lows remains.