Bitcoin has risen nearly 130% this year, currently priced around 96.5k, facing the crucial challenge of breaking through the 100k mark. Since the April halving event, BTC has risen 85%, but its dominance has dropped to 55.6%. Altcoin season is here, with 90% of the top 50 tokens outperforming Bitcoin over the past 90 days, and XRP has risen 370% in a month. Although initially driven by retail investors, the current bull market is being propelled by institutional investors, enhancing market stability. However, the market is facing pressure from increased supply, which may impact Bitcoin's price. Investors are waiting to make decisions after the price breaks through 100k.
Bitcoin has risen nearly 130% so far this year.
Halving, macro factors, on-chain indicators, and Trump's victory have boosted Bitcoin.
BTC's dominance has fallen to 55.1%, and altcoin season has arrived.
Will this altcoin season be any different?
Bitcoin's price is currently trading around 96.5k, consolidating below this year's all-time high of 99.8k, which is nearly a 130% increase. A series of events has boosted BTC, but the token is struggling to push through the critical milestone of 100,000. The biggest question is whether Bitcoin can break through 100k and rise further?
Since the April halving event, Bitcoin has risen 85%, with miner rewards reduced to 3.125 BTC per block. This aligns with previous cycles and triggers a supply shock that pushed prices up to 99.8k in November.
Macro factors such as major central banks initiating a rate-cutting cycle and geopolitical risks driving demand for digital gold have boosted institutional interest. On-chain indicators such as the increase in active addresses, the decline in exchange balances, and the increase in open contracts, along with the election of pro-crypto candidate Trump, have added to the bullish outlook.
However, the price is currently facing some challenges, such as concerns about increased supply and the decline of Bitcoin's dominance.
Yesterday, concerns about the U.S. government's potential sale of 10,000 BTC after transferring $1.92 billion worth of Bitcoin to two separate Coinbase wallets caused Bitcoin's price to briefly dip below 94k. This could be a potential sell signal, especially considering the government's history of selling seized Bitcoin.
The U.S. government holds about 0.93% of Bitcoin's total supply, so selling a portion of it could put pressure on Bitcoin's price, as seen in previous major sell-off cases after significant transfers.
Bitcoin's dominance is declining, and altcoin season is upon us.
More broadly, as Bitcoin's dominance has dropped to 55.6%, the price is facing challenges. This indicates that investors are booking profits from Bitcoin and turning to riskier altcoins, signaling the arrival of altcoin season and a diversified market.
The start of altcoin season is marked by at least 75% of the top 50 tokens outperforming Bitcoin over the past 90 days. Today, that level is 90%, indicating that altcoin season has begun.
Some examples of strong altcoin performance include Ethereum, which has shown bullish patterns in recent trading days as it broke out of an 8-month correction in a manner similar to Bitcoin before rising in November.
XRP has risen 370% in the past month, with a market capitalization close to 150 billion dollars. This token has surpassed USDT and Solana in market cap, partly due to an improved fundamental backdrop, as SEC Chairman Gary Gensler is set to resign on January 20.
So, can Bitcoin reclaim 100k even in altcoin season?
This altcoin season may be different, as the rise of altcoins does not depend on Bitcoin's rotation, but rather comes from increased trading volume in the cryptocurrency market and actual market growth.
While retail investors drove the early cycle, the current bull market has seen strong capital inflows through ETFs. These institutional investors bring a level of credibility and stability that could help Bitcoin break through 100,000, while altcoins also have their shining moments.
Where is Bitcoin heading next?
After breaking out of a seven-month downtrend, Bitcoin soared to a historic high of 99.8k. The price remains in a broad uptrend above the 50, 100, and 200 SMA. However, recent volumes suggest that momentum is waning. Recently, the price has consolidated between 95k and 98.1k, causing the RSI to move out of the overbought territory.
Buyers may wait for the price to rise above 100,000 with increasing volume before entering buy positions.
With increased trading volume, sellers may consider establishing sell positions below 91K. A break below here when the price forms a lower low would open the door to 85.5k.
