Key Insights:
Bitcoin faces a stiff resistance between $97k and $99.5k.
This resistance prevented a sustained breakout above $100k on 8 Jan 2024.
However, Bitcoin's long-term prospects are still intact due to sustained buying by whales and institutions.
BTC is expected to cross $250k by the end of 2025.
The largest factor preventing Bitcoin to cross $100k is the fear of a liquidity crunch. Other factors include withdrawals from retail markets.
The most important factor preventing Bitcoin from crossing $100k is market liquidity. After the US Fed's guidance of high inflation and the diminishing possibility of rate cuts in 2025, the markets gave a knee-jerk reaction and initiated a sell-off, which then corrected Bitcoin from $108k levels to $91k levels.
Further, the increased number of JOLT job openings in the US further prevents a rate cut from the US Fed. Higher job openings mean that the economy is functioning well and that monetary policymakers, i.e., the US Fed, need not intervene.
US Fed interest rates are important for crypto markets because the US is the largest crypto market and hence commands the bulk of the institutional and retail investors in crypto.
Retailers withdrew the maximum from Bitcoin markets in the last one month which was evident because of the ETF withdrawals and retail BTC selling. In the last three trading sessions, on 8, 10 and 13 Jan 2024, Bitcoin ETFs saw withdrawals of $570 million, $250 million, and $185 million respectively.
Bitcoin ETF Outflows Jan 2025
Coinglass
Top crypto expert Ali Martinez explains the critical levels around which Bitcoin faces stiff resistance. The first zone is around $97k and $99.5k, which Bitcoin recently crossed but failed to cross.
Ali explains that the reason for this resistance is the presence of 1.26 million retail buyers who bought 1.26 million BTC. These buyers are probably looking to take an exit after $100k, preventing Bitcoin from decisively crossing this level. This is why Bitcoin did not sustain above $100k in its last attempt on 08 Jan 2024.
Bitcoin's Attempt To Cross $100k on 08 Jan 2024
CoinMarketCap
At press time, Bitcoin is at $97k, close to the lower bound of the resistance zone. We expect slow corporate buying to eventually push Bitcoin above the $100k level, where the current buyers would get a complete exit and new buyers would probably enter the markets.
#Note: There could be significant whales among them, yet the almost 1:1 ratio of BTC to buyer indicates the overwhelming presence of retailers.
Earlier last month, we projected Bitcoin's price to cross $250k. Given the current markets, there was much speculation about whether it would reach even $150k.
Despite all corrections, Bitcoin might easily reach $200k in 2025 and, by the end of the year, even cross $250k. Bitcoin's long-term prospects are pretty much intact because its price did not break down as expected. Several experts predicted that a crash in Bitcoin below $90k could trigger a crash until it reached $70k. Fortunately, that did not happen.
Whale inflows and institutional buying were major reasons the markets avoided that crash. Crypto whales have lately been actively buying Bitcoin, Ethereum, Dogecoin, XRP, and multiple other Layer-1 coins due to their high utility.
Further, institutional investment in Bitcoin propped it higher. Recently, Michael Saylor announced that MicroStrategy had bought 2530 BTC at $243 million. Due to its much lower average buying price, MSTR is out of risk even if Bitcoin falls 30%, prompting it to buy with confidence.
Several other companies, such as Riot Platforms, Metaplanet, and Marathon Digital, have been using the same method to buy Bitcoins (via convertible debt).
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.