Bitcoin market sentiment has reached a peak as traders anticipate a shift towards cryptocurrency support following Donald Trump's inauguration as president on January 20. Investors are betting on a historic rally that could push prices to $120,000 or beyond.
With Bitcoin trading near $101,810, exchanges like Deribit have seen an increase in interest for $120,000 BTC call options, currently at $1.52 billion. Greg Magadini, director at Amberdata, believes that bullish momentum could be driven by policy announcements and favorable sentiment surrounding Trump's cryptocurrency stance.
Technical Analysis: Two potential scenarios
Technical analysts are monitoring two potential scenarios for Bitcoin's price. The first scenario is a bullish breakout. BTC has recently reflected a Wyckoff accumulation pattern, last seen during the FOMC's rate cut. Analysts state that holding the support level of $90,800, with a potential wick down to $86,500, would confirm the upward trend.
However, Monday is where fears of a 'brutal' scenario exist. Immediate resistance at $102,760, the recent weekly high, requires a decisive breakout with high volume to confirm the next leg up. A clear move above this level could push Bitcoin to $110,000 or higher in the coming weeks.
Risks to Bitcoin's growth momentum
If Bitcoin faces rejection at the current resistance level, it may drop back to test support levels near $97,000 or $90,000, creating a buying opportunity for traders. Failure to hold these levels may lead to a sharp adjustment, testing Bitcoin's recent gains.
Bitcoin's candlestick chart highlights the market's hesitation, with buyers and sellers evenly matched near the resistance level. This tug-of-war emphasizes the high-risk nature of Bitcoin's price action as traders anticipate potential policy changes from Trump.
With the inauguration just weeks away, Bitcoin is at a critical juncture. Whether this leads to a breakout rally or a correction, Bitcoin remains the focal point of global financial discussions.
