Investors remain cautious as the crypto market attempts to recover from the decline at the beginning of the week. Bitcoin has lost some ground, falling to $104,000 on Friday, although it tested $106,000 on Thursday.
Bitcoin Surpasses $106K, But Profit Taking Continues to Pressure
The total value of the crypto market increased by 0.4% in the last 24 hours, reaching $3.57 trillion. However, it is still down 1.4% compared to last week. The market is undergoing a slow and uneven recovery, and investors prefer to act cautiously.
The crypto sentiment index entered the “extreme greed” zone, rising to 76 on Friday, the highest level in the last two and a half weeks. However, the lack of a strong FOMO (fear of missing out) in the market is weakening bulls’ expectations of a quick profit. In traditional markets, such a cautious rise is generally considered more sustainable.
One of the main reasons why Bitcoin has pulled back despite exceeding $106,000 is that investors are taking profits at these levels. In recent weeks, Bitcoin holders have sold around 75,000 BTC ($7.5 billion), while miners sold 20,000 BTC (about $2 billion) in mid-January. On-chain analytics firm Glassnode noted that long-term investors have slowed down in the pace of selling, while CryptoQuant emphasizes that leverage in Bitcoin derivatives markets has not reached the extreme levels seen in the 2021 bull rally. This suggests that there may be a more balanced uptrend in the market.
Corporate and Government Investments Support Bitcoin
According to Bitwise’s analysis, based on historical data, Bitcoin is expected to exceed $200,000 in 2025. This forecast is driven by the increasing demand for Bitcoin ETFs and BTC purchases by some countries and large companies. Tesla announced that it made $589 million in profit from its Bitcoin holdings in the last quarter of 2023. The company’s total net profit reached $7.1 billion by 2024, while it was stated that it held 11,509 BTC ($1.21 billion).
Meanwhile, the El Salvadoran parliament quickly approved a bill that includes changes to the country’s Bitcoin strategy, in line with agreements with the International Monetary Fund (IMF). El Salvador, which plans to receive a $1.4 billion loan from the IMF, currently holds 6,049 BTC ($635 million).