Crypto markets held their breath last week as Bitcoin nearly breached the $100,000 mark, but ultimately failed to achieve this historic breakout as momentum stalled and quickly fell back.
Last Friday, the price of Bitcoin hit a record high of $99,588, but fell back before breaking the six-digit mark. As of 13:00 on Wednesday, Bitcoin was hovering around $92,500, and has fallen more than 5% this week. Matt Mena, crypto research strategist at 21Shares, said that for investors who have held Bitcoin since the last bull market, $100,000 is a psychologically significant selling point.
Bitcoin daily chart
He noted in an interview that Bitcoin holders may foresee a pullback near this price level, and thus choose to sell part of their holdings to lock in profits. He also mentioned that this behavior has occurred at previous Bitcoin highs.
“In March this year, when Bitcoin hovered around the historical high of $69,000 in 2021, a similar pattern appeared. Bitcoin lingered at that price level for nearly seven days before finally breaking through... As the price approached this level, many participants from the previous cycle began to take profits, anticipating a possible pullback.”
Other analysts believe that the deep pullback in Bitcoin may also be attributed to other factors. FxPro's chief market analyst Alex Kuptsikevich mentioned that the easing of geopolitical tensions between Lebanon and Israel has weakened investor demand for safe-haven assets like Bitcoin.
When can Bitcoin reach $100,000?
Matt Maley believes that if Bitcoin's price continues to decline, it could drop to $80,000. He stated that options traders focused on cryptocurrencies also support this view, with a large number of December-expiring options contracts betting on Bitcoin dropping to $80,000.
“$80,000 support level may be the limit of this pullback, and this could actually benefit the healthy development of the market... Bitcoin often retests previous support levels to consolidate upward momentum and clear leveraged positions and short-term speculators.”
However, before dropping to this level, Bitcoin will first test several support levels above this price. Maley pointed out that the next key support level below $90,000 is $87,000. Standard Chartered expects Bitcoin to recover after dropping to this level. Maley still anticipates that Bitcoin will rebound before the end of the year, with the holiday season potentially pushing Bitcoin to a range of $110,000 to $120,000.
“During holiday gatherings, investors often share their enthusiasm for Bitcoin and cryptocurrencies with family and friends, discussing their profits and showcasing their gains and losses... This can spark curiosity and interest, attracting new investors into the space. We have seen this happen several times over the past few years.”
He also expects that crypto investors will exhibit a 'run-up' behavior before the presidential inauguration in January next year, similar to the situation before the November elections. At that time, investors pushed crypto prices up due to their excitement over Trump's eventual victory.
“This preemptive activity may generate the momentum needed to break through $100,000.”
Investors have great expectations for Trump's second term. The incoming president has publicly supported cryptocurrencies, suggesting the possibility of creating a national Bitcoin reserve, and is reportedly screening candidates for White House positions related to cryptocurrencies.
Article forwarded from: Jin Ten Data
