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.
The Elliott Wave Theory states that asset prices consist of five waves in the direction of the main trend and three counter-trend correction waves in each cycle. Each correction wave follows a wave in the direction of the main trend.
“We saw Bitcoin fall below $92,000 earlier this week, so we may have completed the correction wave before heading toward $125,000,” Glover said in a phone interview.
Glover said that if Bitcoin breaks above $125,000, it could experience another pullback before heading towards cycle highs near $160,000.
Glover said Bitcoin could see a pullback ahead of Trump’s inauguration on Jan. 20 as investors take profits.
Cryptocurrency bulls expect the regulatory environment to become more favorable under Trump’s presidency. They are watching to see whether the new president will soon follow through on his promises to the industry, especially his pledge to build a strategic Bitcoin reserve in the U.S., though Trump has yet to detail any specific plans.
Glover said that if Trump does not take any action to deliver on his promises early in his administration — especially in his first 100 days in office — Bitcoin could see a pullback. Politicians and analysts often use the first 100 days of an administration as a measure of the effectiveness and impact a new U.S. president may have.
However, Glover noted that based on the technical setup, it is unlikely that Bitcoin will fall below $77,000.
Analysts at blockchain data platform Glassnode said investors should also keep a close eye on the $87,000 level, which is the short-term holding cost basis for Bitcoin assuming the cryptocurrency is fairly valued. This type of “on-chain” analysis examines data recorded directly on the blockchain network to gain insight into market trends or investor behavior.
Analysts point out that there is a demand gap between $87,000 and $71,000, making the former a “make or break” level for Bitcoin’s price in the short term. Glassnode analysts say that this level acts as support in an uptrend; however, if decisively broken, Bitcoin’s price could turn into resistance, indicating a shift in market sentiment.
QCP Capital analysts said that another key catalyst for Bitcoin in January could be the rebalancing of portfolios by financial institutions. Hedge funds and asset managers often choose to rebalance their portfolios in January to develop full-year strategies, adapt to market conditions and optimize tax impacts.
QCP analysts noted that Bitcoin allocations could increase this year as more institutions adopt Bitcoin following the launch of spot Bitcoin exchange-traded funds last year and strategists expect the regulatory environment for cryptocurrencies to improve.
