Last week, Bitcoin was just one step away from breaking the $100,000 milestone, reaching a high of $99,655.5, setting a new historical record. However, this attempt to break through faltered at the last moment, with Bitcoin's price retreating from its peak and currently hovering around $91,749, down nearly 8% from the peak. This pullback has once again sparked heated discussions in the market: will Bitcoin's next trend be a deep adjustment or a resumption of the upward trend?
This pullback of Bitcoin is largely related to the psychological barrier effect and profit-taking by investors. The $100,000 mark is not only a technical milestone for the market but also a strong psychological resistance. According to analysis by Matt Mena, a cryptocurrency research strategist at 21Shares, investors often choose to sell to lock in profits as Bitcoin approaches key highs.
Mena pointed out that this phenomenon also occurred during the 2021 bull market. At that time, when Bitcoin approached its historical high of around $69,000, the market experienced a similar stagnation and pullback. Investors' psychological tendencies made these key price points 'testing points', triggering market fluctuations in the short term.
In addition to profit-taking within the market, changes in the macro environment have also provided momentum for Bitcoin's pullback:
Alex Kuptsikevich, chief analyst at FxPro, pointed out that recent easing tensions in the Middle East have led to a decreased interest from investors in safe-haven assets like Bitcoin. This shift has made the flow of funds more stable towards traditional assets.
A report from Standard Chartered mentioned that the recent decline in the premium on U.S. Treasury maturities may also lead to a pullback in Bitcoin prices. Generally, a decline in U.S. Treasury yields enhances the attractiveness of assets like Bitcoin. However, after Trump announced new tariff measures, U.S. Treasury yields temporarily rose, suppressing Bitcoin's short-term performance.
From a technical perspective, analysts expect Bitcoin to continue adjusting in the short term, and it could even fall to the key support level of $80,000:
Mena mentioned that Bitcoin's current support levels are around $90,000 and $87,000. If it falls below these levels, the next target price will be $80,000.
He also emphasized that this adjustment of Bitcoin is necessary, helping the market to clear high-leverage positions and weak traders. By solidifying its foundation, Bitcoin finds it easier to break through psychological resistance and achieve higher targets.
Although Bitcoin has shown a significant pullback recently, the market is generally optimistic about its future trend. Mena predicts that with the holidays approaching and market sentiment warming up, Bitcoin may break through $100,000 by the end of the year and further rise to a range of $110,000 to $120,000.
During the holidays, many investors discuss Bitcoin's performance with family and friends, attracting new capital and interest into the market. This 'word-of-mouth effect' has played out multiple times in previous bull markets.
Trump's support has injected new expectations into the market. The president-elect has clearly expressed support for Bitcoin and cryptocurrencies, with reports suggesting he is planning to establish a national Bitcoin reserve and appoint a White House cryptocurrency affairs director. These policy signals may further boost market sentiment ahead of the inauguration in January 2024.
The pullback of Bitcoin before the $100,000 mark, while disappointing for some investors, is seen as a healthy and necessary adjustment from historical experience and market logic. As the market completes the cleaning of high-leverage positions, combined with the dual boost of holiday effects and political drivers, Bitcoin may see a new rise at the end of the year.
Of course, investors need to be wary of significant market fluctuations in the short term while seizing opportunities in the long-term trend. Will Bitcoin reach new heights in 2024? Follow me and witness every leap in the market!