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Highlights
Bitcoin price is down -2.80% today and trades at $102,086.0. This pullback has undone 50% of the gains noted after the FOMC meeting and will likely continue this descent as month-end volatility kicks in. With the long-term outlook still bullish and historical data signaling more gains in February, will BTC reach new highs at $123K? Let’s explore.
Since mid-November 2024, Bitcoin price has been moving sideways. Although BTC has attempted to leave this range multiple times, it has lacked strength. As a result, multiple new highs have been created in the past 78 days of the ongoing consolidation. The most recent ATH of $110K was set up on January 20.
Between November 14 and 22, 2024, Bitcoin shot up nearly 14% to $99,660. Using Fibonacci tool to this trend shows the next ATH was formed at 161.8% Fib level. Considering a similar outlook, the next ATH could form around $123K.
To achieve a new all-time high at $123K or beyond here are four changes or developments that need to occur.
Bitcoin price needs to overcome the $105.5K resistance level. This level is where BTC faced rejection, pausing the post-FOMC rally.
The second condition that hints BTC could reach a new ATH is the divergence between retail and institutional investors. Data from Santiment shows that wallets holding 0 to 10 BTC, belonging to retail investors have been dropping. On the other hand, wallets holding 100 to 1000 BTC have been accumulating. Typically, retail investors react much more to short-term noise and tend to capitulate before the price reaches new highs. Whale accumulation hints that the uptrend is not over and a new ATH is possible.
Whale transaction activity, ie., tranfers worth $100K, have dropped since January 24. As noted in the image a spike in this metric often helps drive prices higher. On the contrary, a drop suggests that whales are not interested and is likely going to lead to a period of consolidation or drop. Once this indicator sees a reversal, Bitcoin price has a high probability to reach ATHs.
From a historical standpoint, the average monthly return for January is around 4%. But February’s average return hovers around 15.66%. Hence, the chances of a new ATH in February, potentially at $123K are high.
Out of the above four conditions, two are met, Bitcoin needs to overcome $105K hurdle and whale transctions greater than $100K needs to pause its freefall and spike again. Once all four conditions are met Bitcoin price could set up a new all-time high at $123K.
With the end of January, investors can expect the volatility to remain high. Since Thursday’s $106,450 high, Bitcoin price has shed 2.04%. Investors can expect this short-term downtrend to continue around the New York open.
In such a case, here are some key demand levels to watch: $101.5K, $100K, $98.2K and $96.8K.
These key support levels are good places to accumulate Bitcoin (BTC) at a discount. A bounce at these levels could lead to an ATH. Here is a key resistance level to watch: $105K. Overcoming this level will allow Bitcoin price to revisit the current ATH of $110K and set up a new one at $123K.
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This content is purely for educational purposes and should not be considered as financial advice. Do your own research before investing in any crypto platform and only invest the amount you can afford to lose.
DAILY NEWSLETTER
Your daily dose of Crypto news, Prices & other updates..