Bitcoin bulls are fighting for $100,000 as the first full trading week of 2025 gets underway.
- A strong weekly close is followed by near 2025 highs for BTC/USD, with the $100,000 mark in sight.
- The six-figure line in the sand is increasingly important for Bitcoin (BTC) traders, playing host to large amounts of liquidity ripe for squeezing.
- Macroeconomic data brings fresh risks for crypto amid mixed policy signals from the Federal Reserve.
- Bitcoin retail investors are still on holiday despite the BTC price recovery.
- Short-term holders are slowly adding profitability, but the euphoria that accompanied the trip to $108,000 has cooled.
Bitcoin “deeper correction” fears linger
The digital currency Bitcoin demonstrated strong growth after concluding the previous week with a price point approximately $98,300, according to information from CryptoMoon Markets Pro and TradingView.
At the point I’m writing this, Bitcoin (BTC/USD) reached an unprecedented high of $99,857 on Bitstamp – a level not seen since December 26. In simpler terms, during my writing, Bitcoin experienced a 1% increase and touched its highest price in more than a month.
For market observers, the implications of this have not gone unnoticed.
According to trader and analyst Aksel Kibar, as per a long-term analysis of Bitcoin’s price chart against the US Dollar (BTCUSD), a conservative prediction for the potential price target is currently set at approximately 137,000 dollars in his latest post on X.
Cheds Trading anticipates the possibility of a head-and-shoulders top pattern being reversed, as observed on a daily scale.
It appears that experienced trader SuperBro recognized the possibility of Bitcoin surpassing its remarkable performance in Q4, as the BTC/USD pair came close to touching its 10-week moving average (SMA), during the correction from recently established record highs.
In that X thread, SuperBro stated that every occasion where the 10-Moving Average was touched after a powerful move, it was subsequently followed by an even more intense move.
“Also note the next leg up has not only been stronger, it has also been faster. A tall order in the face of that monthly candle, but very possible if we squeeze through it.”
Some believe there could be a more significant drop in Bitcoin prices, possibly undoing much of the gains made during the final quarter of last year.
In simple terms, Keith Alan, co-founder of Material Indicators, cautioned as the week ended that the 21-day Moving Average (MA) on the Bitcoin Daily chart is approaching a “Death Cross” event with the 50-day MA. This means that the shorter-term moving average could potentially cross below the longer-term one, which is often seen as a bearish signal in technical analysis.
“Even though it is technically a lagging indicator, historically, Death Crosses tend to develop into more downside. But that doesn’t have to be the case here.”
Alan said holding the 21-day SMA, currently at $96,957, is key to avoiding the bearish scenario.
If Bitcoin manages to stay above its 50-day moving average and rebound towards its all-time high levels, it would indicate a temporary drop, but if the price falls below its 21-day moving average, there might be signs of a more substantial correction, according to his analysis.
“If the latter scenario comes into play, I’m prepared to see the CME Gap filled and support tested at the consolidation range ~$76k.”
$100,000 back in the spotlight
For individuals trading Bitcoin, reaching the $100,000 level holds renewed near-term importance and serves as a crucial milestone in fueling the ongoing bull market.
Regardless of differing views about its technical and psychological significance, Bitcoin bulls are presently focusing their efforts on capturing the $100,000 mark.
The current liquidation points on various cryptocurrency exchanges are generally around the seven-digit mark, which means that the next important Bitcoin price milestone is just beyond this figure.
On January 6th, CoinGlass observed a substantial amount of liquidity around the $100K mark, indicating a possible short squeeze or liquidity-driven event might occur.
Despite the data from CoinGlass suggesting otherwise, it appears that most traders seemed to anticipate a challenge at the $100,000 resistance level during the weekend, as evidenced by only $26 million worth of 24-hour liquidations.
Meanwhile, Alan from Material Indicators demonstrated a continuous trend of purchasing activity across various order categories, as smaller investors joined the ranks of the ‘whales’ in escalating their involvement.
On January 5th, he shared that FireCharts Binned CVD indicated all categories of orders were activating the Bitcoin purchase button, as he was reporting from X, utilizing one of Material Indicators’ exclusive trading resources.
Among those eyeing a price move into the high-liquidity $100,000 zone was trader XO.
He emphasized that the 100k milestone for mid-level positions is a significant turning point to his audience, hinting that a potential downturn could occur after this event.
He further commented, “If the demand zone is tested again, I believe it would be a good opportunity to buy (long position).” Accompanying this statement was a chart indicating a potential downside target of $90,000.
Fed minutes due in tense macro climate
Crypto and risk assets are on edge as the 2025 macroeconomic calendar gets underway.
Once again, inflation has moved into focus, bringing along an increase in unemployment rates. This combination, often referred to as “stagflation,” can potentially cause difficulties for traders.
After the more aggressive stance shown at the Federal Open Market Committee (FOMC) meeting in December, there is growing doubt among analysts that the U.S. Federal Reserve will make any additional interest rate reductions. The minutes from that meeting are set to be released this week, which could rekindle concerns and dampen Bitcoin’s recent strong performance.
According to the FedWatch Tool by CME Group, there’s a 9.1% chance that the Federal Open Market Committee (FOMC) will lower interest rates by 0.25% in their next meeting.
The focus is on labor market figures as we approach the Federal Reserve meeting scheduled for January 29th, according to a report by trading resource The Kobeissi Letter.
As an analyst, I’m eagerly anticipating the release of the Federal Reserve (Fed) minutes and the December jobs report, scheduled for January 10th. Notably, this report will be published a day following the initial jobless claims data.
Instead, Kobeissi highlighted decreasing U.S. bank reserves as a possible indicator for a new phase of monetary stimulus – instead of quantitative tightening (QT), we might see quantitative easing, or QE, being implemented again.
Between December 28 and January 1, reserves dropped by a substantial amount, totaling $326 billion, reaching their lowest point since October 2020.
In the meantime, the Federal Reserve is steadily reducing its holdings (Quantitative Tightening) at a monthly rate of around $60 billion.
“Is the end of QT coming soon?”
Retail investors forget about Bitcoin
Bitcoin retail investors are all but “gone” at just 10% below all-time highs.
Analyzing historical transaction activity typically linked to individual investors in the retail sector, the crypto analytics platform CryptoQuant indicates a significant shift in involvement.
In a Quicktake blog post on January 5, contributor Darkfost put it this way: “Retail investors came and went just as swiftly!
Over the past 30 days, there’s been a noticeable drop in small-scale Bitcoin transactions, those under $10,000, compared to the period just after Bitcoin hit its all-time high of approximately $108,000 USD last month. I’ve observed this trend as an analyst.
“As BTC approached $100K, retail demand variation surged by over 30%,” the post said.
“Historically, when retail demand variation exceeds 15%, it often precedes a local top. This was exactly what we observed after BTC reached its new all-time high at $108K.”
Bitcoin’s return below the $100,000 mark was accompanied by a 16% dive in the 30-day metric.
As an analyst, I’ve observed that when this variation dips below -10%, it typically indicates a substantial decrease in retail interest. This situation often presents a favorable buying opportunity, as a bullish response has historically followed.
As for how retail investors may respond to a rise in Bitcoin’s price, CryptoQuant suggests that gradual upticks in demand could potentially spark significant improvements in the cryptocurrency’s performance.
In my recent study, I’ve noticed an intriguing pattern: The retail sector seemed to require several months to adapt to the shifting trends, as Bitcoin (BTC) surpassed its previous all-time high against the US Dollar ($73,800), a level not seen since March of last year.
Speculators at a crossroads
Another Bitcoin investor segment, the so-called short-term holders (STHs), is at a critical point.
For entities holding Bitcoins (STH) for a maximum of 155 days, their profitability tends to be close to the break-even mark.
According to CryptoMoon’s report, the journey to approximately $108,000 provided STHs with substantial profit, but this gain nearly vanished during the subsequent drop close to $90,000.
Now, at just below the $100,000 level, STH profits hang in the balance.
In a recent blog post, Crazyblockk from CryptoQuant cautioned that a decrease in profitability for short-term investors could be an indication of waning market demand and pessimistic sentiments persisting over both the immediate and mid-term future.
“Therefore, under current conditions, this suggests an elevated likelihood of price corrections driven by reduced demand and subdued performance.”
A related graph demonstrates how profitability has been affected starting from $108,000; it’s important to note that, despite this, we are yet to experience the kind of losses typical in market slumps.
Further analysis of CryptoQuant’s data provides additional insights into the varying experiences of new investors pouring into Bitcoin due to volatile market conditions.
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2025-01-06 13:34