- BTC and ETH show solid Q4 gains but face cautious sentiment heading into 2025.
- Market sentiment suggests steady growth, with February likely seeing more action.
- March options flows indicate optimism, though near-term price movements remain unclear.
Bitcoin (BTC) and Ethereum (ETH) closed Q4 2024 with notable gains, reflecting a mix of market growth and cautious sentiment. BTC surged 48%, while ETH rose 30%, despite both consolidating near their monthly range lows.
Market momentum remains steady, with December’s returns matching the broader Q4 performance. Analysts point to stable funding rates and January’s historical trends, which often favor positive growth. However, traders show hesitancy to take significant positions as year-end volatility subsides. With a strong Q4 behind them, BTC and ETH are positioned for potential gains in 2025, supported by increased options activity and market optimism.
Related: BTC Set to Hit $185K in 2025 as ETH Eyes $5,500 Milestone: Galaxy Research
Month-to-date returns for BTC are relatively flat, suggesting a lack of immediate momentum. However, the overall market sentiment remains positive due to the strong Q4 performance. Nonetheless, it may be premature to draw definitive conclusions about the quarter’s outcome.
Market dynamics are still in flux, and BTC could see additional price support. For example, Michael Saylor recently shared his Bitcoin purchase tracker, which could signal another round of large-scale BTC purchases. This could further support Bitcoin’s price.
Quarter-End Volatility Decline Influences Market Sentiment
Despite the positive Q4 performance, the crypto market is unlikely to see major short-term price swings. Funding remains healthy, and January’s average returns (+3.3%) are similar to December’s (+4.8%).
As a result, the market is expected to remain within its current range, with spot prices remaining relatively stable until at least February. This could be because many traders are waiting to take significant positions until after the holiday season.
Related: Bitcoin and Ethereum Price Correction: Market Sentiment and Analysis
However, as the year progresses, there could be more opportunities for price growth, especially as January’s slower pace gives way to February’s potential activity.
Options Activity Points to March Optimism
Options flows also reflect a cautious market outlook, with front-end volatility drifting lower. The risk-reversal curve shows growing interest in call options for March, partly driven by the significant number of calls (120k-130k) bought last Friday.
This suggests that traders anticipate a potential price increase in the coming months but remain uncertain about the near-term market direction.
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