Author: Frances Yue, Market Watch; Translated by: Deng Tong, Golden Finance
Bitcoin could rise to a new all-time high above $125,000 in the first quarter, or fall to $77,000 — the key to whether President-elect Donald Trump follows through on his promises to the cryptocurrency industry shortly after taking office, one analyst said.
John Glover, chief investment officer of crypto lending platform Ledn and former managing director of Barclays Investment Bank, said that according to the technical analysis tool Elliott Wave Theory, Bitcoin is expected to fall to $89,000 and then break through $125,000 in the first quarter of 2025.
Elliott Wave Theory suggests that asset prices consist of five waves in the direction of the main trend and three corrective waves against it in each cycle. Each corrective wave follows a wave in the direction of the main trend.
Glover stated in a phone interview: 'Earlier this week, we saw Bitcoin drop below $92,000, so before moving towards $125,000, we may have already completed the corrective wave.'
Glover indicated that if Bitcoin breaks through $125,000, it may experience another pullback before approaching a cycle high near $160,000.
Glover stated that as investors take profits, Bitcoin may see a pullback before Trump's inauguration on January 20.
Crypto bulls expect that during Trump's presidency, the regulatory environment will become more favorable. They are watching whether the new president will quickly fulfill his promises to the cryptocurrency industry, particularly his commitment to establish a strategic Bitcoin reserve in the U.S., although Trump has not detailed any specific plans.
Glover stated that if Trump does not take any action to fulfill his promises during the early days of his administration—especially in the first 100 days after taking office—Bitcoin may experience a pullback. Politicians and analysts often use the first 100 days of a new U.S. president's administration as a benchmark for measuring potential achievements and impacts.
However, Glover pointed out that, based on technical setups, Bitcoin is unlikely to drop below $77,000.
Analysts from blockchain data platform Glassnode indicate that investors should also closely watch the $87,000 level, which serves as the short-term holding cost basis for Bitcoin under the assumption of reasonable cryptocurrency valuations. This 'on-chain' analysis examines data directly recorded on the blockchain network to gain insights into market trends or investor behavior.
Analysts noted that there is a demand gap for Bitcoin prices between $87,000 and $71,000, making the former a 'make or break' level for Bitcoin's short-term price. Glassnode analysts stated that this level acts as support in an uptrend; however, if decisively broken, Bitcoin's price may turn into a resistance level, indicating a shift in market sentiment.
QCP Capital analysts indicate that another key catalyst for Bitcoin in January could be the rebalancing of investment portfolios by financial institutions. Hedge funds and asset managers typically choose to rebalance portfolios in January to formulate strategies for the year, adapt to market conditions, and optimize tax implications.
QCP analysts pointed out that Bitcoin's allocation may increase this year, as more institutions have adopted Bitcoin since the launch of spot Bitcoin exchange-traded funds last year, and strategists expect the regulatory environment for cryptocurrencies to improve.
