Recently, Bitcoin (BTC) has seen a 4% increase, boosted by the "Christmas rally". However, despite the market's seemingly warming up, there are still many psychological risks, especially at the critical moment of the bull market rebound.
BTC latest news
Ten days ago, Bitcoin reached a high of $108,000, a price level that has been the focus of market attention since the "Trump pump." However, while the market has not shown signs of excessive speculation - the greed index remains below 90 - investors' vigilance is still increasing with expectations of more "cautious" policies in 2025. As a result, BTC prices plummeted, erasing some of the gains at the end of the election cycle.
This price volatility caused a large number of investors to cash out around $94,000, realizing profits of more than $7.17 billion. Although this may seem like a setback, in fact, the exit of weak hands usually creates space for new funds to enter the market, thereby injecting new vitality into the market.
Market reaction: cashing out and rebounding
After this price retracement, BTC gradually recovered to the $100,000 price range. However, despite this, the market still did not show a large-scale influx of funds. The demand of institutional investors through Bitcoin ETFs remained sluggish, and there were outflows for four days.
On the other hand, retail investor purchases, while picking up, are still not enough to put the market into a full-blown “accumulation” phase. Based on these observations, BTC prices are likely to remain between $100,000 and $105,000, fueled by New Year excitement. A new all-time high (ATH) still appears out of reach.
Risk aversion affects the market
Against the backdrop of the cash-out wave and price fluctuations, BTC exchange reserves reached 2.427 million, the highest level since November. The SOPR (profit reinvestment rate) of short-term holders also reached 1.04, indicating that many short-term holders are locking in profits and exiting the market. In addition, the increase in BTC inflows to exchanges and the average deposit price of $98,000 indicate that investors mainly cash out in this price range.
All these signals indicate that the short-term price correction area of BTC may be around $92,000. Nevertheless, the short-term rebound brought about by the festive atmosphere has injected some vitality into the market, and BTC has returned to the $98,000-100,000 range.
Future Outlook: Accumulated Strength during the Integration Period
Bitcoin's historical data shows that the first quarter of each year is usually a bullish period, and market demand exceeding supply often leads to price increases. However, the current market environment is different from previous years, and external forces are increasingly influencing market trends. Even if on-chain indicators remain healthy, the lack of support from economic signals may become a major obstacle to BTC's rebound.
Therefore, while the current pullback may make investors uneasy, it may also be a critical period for BTC to accumulate strength for the next wave of gains. The consolidation in the $95,000 to $98,000 range may provide momentum for a rebound in the coming weeks after squeezing the profit space of risk-averse investors. Investors' "fear of missing out" sentiment may be reignited during this period, creating conditions for future price increases.
Currently, Bitcoin is still in a high-risk market environment. Although there has been a short-term rebound, large-scale retail and institutional capital has not yet arrived. Whether BTC can break through the historical high in the coming weeks will directly affect the next direction of the market. If it can break through the high of $108,000, it may usher in a larger-scale rise; but if it fails to break through, the market may continue to consolidate and accumulate momentum for a future rebound. Under the current market conditions, BTC's pullback and consolidation period may be the key necessary for future growth.
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