Despite a lack of institutional buying power due to the holidays, Bitcoin analysts are optimistic about an imminent recovery above the $100,000 mark. The Bitcoin price has been trading under this psychological threshold since December 19 and is currently down 9.7% from its all-time high of above $108,300 recorded on December 17.
Current Market Conditions
According to Ryan Lee, chief analyst at Bitget Research, the current downtrend is an organic symptom of holiday illiquidity:
Post-Christmas, market activity typically picks up again, with funds expected to actively position for sectors that might benefit from Trump’s upcoming inauguration… The expected trading range for BTC this week is $94,000 – $105,000.
This prediction comes nearly a month ahead of Donald Trump’s presidential inauguration on January 20, which is considered a positive event for cryptocurrency regulations in the United States and overall economic policy leading up to 2028.
Holiday Illiquidity: A Brief Explanation
During the holiday season, market activity tends to slow down due to reduced trading volume. This phenomenon is often referred to as "holiday illiquidity." As a result, prices may be more volatile, making it challenging for investors to navigate the market.
Bitcoin Recovery to $105,000 Imminent?
While Bitcoin’s current price action remains limited by the slump in US spot Bitcoin exchange-traded funds (ETFs), analysts remain optimistic about its prospects. The expected trading range of $94,000 – $105,000 suggests that a correction and exceedance above the $100,000 mark may occur once liquidity returns.
The Role of Bitcoin ETFs
Bitcoin’s current price action is indeed limited by the slump in US spot Bitcoin exchange-traded funds (ETFs). According to Farside Investors data, the Bitcoin ETFs are on a four-day losing streak, recording over $338 million worth of cumulative net outflows on December 24.
Historical Context: The Importance of ETF Inflows
ETF inflows have been a significant driver for Bitcoin’s rally during 2024. The US spot ETFs accounted for about 75% of new investment in Bitcoin, pushing its price past the $50,000 mark by February 15.
Bullish Signals: Funding Rate and Technical Chart Patterns
Another bullish signal is seen in Bitcoin’s funding rate, which is at 0.0100% on Binance, the world’s largest exchange, according to CoinGlass data. This positive funding rate signals a buyer-dominated market, where buyers pay sellers a fee (positive funding rate) to maintain their positions.
However, technical chart patterns suggest that Bitcoin’s correction may extend, wrote crypto analyst Rekt Capital in a December 24 X post:
Bitcoin showed some signs of a relief rally after which price was rejected to almost new lows… Overall, as long as the previously lost supports turn into new resistance – additional downside should be expected.
Long-Term Outlook: Improved Macroeconomic Conditions and $160,000 Target
Analysts remain optimistic about Bitcoin’s trajectory for the next year. Improved macroeconomic conditions could fuel Bitcoin’s rally to $160,000 in 2025, according to a report from crypto services provider Matrixport.
In conclusion, while the current market conditions present challenges for Bitcoin’s price action, analysts remain bullish on its prospects for an imminent recovery above the $100,000 mark. The expected trading range of $94,000 – $105,000 suggests that a correction and exceedance above the $100,000 mark may occur once liquidity returns.
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