Price Analysis

Bitcoin Price Hits $100K But Why Are Traders Cautious?

Bitcoin price hits $100K, sparking excitement, but traders remain cautious. Explore Why this is the case What's next for BTC in January 2025?
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Bitcoin Price Hits $100K But Why Are Traders Cautious?

Highlights

  • Bitcoin price hits $100K, but traders remain cautious.
  • Recent open interest spike threatens Bitcoin's price rally.
  • The US dollar index's potential correction adds to traders' cautiousness.

Bitcoin (BTC) price hit $100K on Monday, bringing the excitement back to the crypto market after 11 days of sideways movement. BTC today trades at $97,073.0 after a -4.97% move. Despite this bullish accomplishment traders are cautious.

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Bitcoin Price Analysis

Bitcoin price shot up 3.91% on Monday, moving from $98,340 to $102,185. This uptrend caused altcoins and the broader crypto markets to shoot up as well. Despite the bullish development of crossing the $100K psychological level, some traders and investors remain cautious and expect a reversal or market correction.

As shown in the Bitcoin chart below, the recent uptick has pushed BTC to face rejection at the 161.8% Fibonacci retracement level of $102,306. This common area of reversal adds credence to what traders are already insinuating.

BTC/USDT 1-hour chart

Let’s explore some expert insights and what they are expecting from BTC price and crypto markets.

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Bitcoin’s Sudden OI Uptick Threatens Recent Price Rally

TradingRiot’s Adam notes that the recent rally in Bitcoin to $100K was accompanied by massive open interest spike. 

Adam adds,

“From a relative change point of view, when OI surges very quickly in a short period of time, buyers (or sellers) often get shaken off before any continuation is higher”

BTC Price Rally vs. Open Interest

Will Bitcoin Rise As US Dollar Tops? This Trader Remains Cautious

BluntzCapital, a popular crypto KOL with 306K followers, posted that the US dollar index (DXY) “looks topped” after a three-month rally. The analyst now expects DXY to correct below 99. As mentioned in yesterday’s CoinGape article, risk-on assets like Bitcoin rallies if DXY drops. BluntzCapital says this drop should be good for risk assets, but since Bitcoin and US equities rallied or held up well during DXY’s three-month rally, the analyst remains cautious.

Bitcoin’s Fractal Suggests Price May Dip Before Bull Rally

ImmortalCrypto also remains cautious with the recent Bitcoin price rally owing to the “start of the year” fractal. In his X post, the analyst details that the start of 2025 saw the price pump a lot, followed by a sweep of December lows. Only after this move occurred did BTC kickstart a massive uptrend.

Based on this fractal, Bitcoin is yet to sweep the December 2024 lows, especially if history repeats. This outlook presented by ImmortalCrypto falls in line with CoinGape’s Bitcoin price prediction that notes a BTC rally kickstarts after sweeping the previous month’s lows. This pattern has been repeating almost every month since May 2024.

Read More: How High Can Bitcoin Price Go In January 2025?

BTC/USDT 12-hour Chart

Crypto Markets To Suffer Liquidation If BTC Reverses Uptrend

If Bitcoin corrects as many traders expect, it could trigger a liquidation event. Ai16z (AI16Z), Worldcoin (WLD), Render (RENDR) and other altcoins that shot up due to BTC’s recent uptick could undo their recent gain.

Depending on the strength and volatility of Bitcoin’s price correction, there could be a massive liquidation event. According to CoinGlass data, $130 million worth of short positions got wiped due BTC’s Monday rally. The opposite could occur if Bitcoin crashes and undoes the near-4% gain.

Crypto Liquidations, CoinGlass

In conclusion, while Bitcoin’s price surge to $100K has sparked excitement, but traders remain cautious. some of the reasons why these investors remain hesitant include the recent open interest spike, the potential correction in the US dollar index, and the “start of the year” fractal.

As the market navigates these complexities, it’s essential to keep a close eye on Bitcoin’s price movement and its potential impact on the broader crypto market.

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Frequently Asked Questions

Why are traders cautious about Bitcoin's price surge?

Traders are cautious due to factors like the recent open interest spike, the US dollar index's potential correction, and the "start of the year" fractal.

What is the "start of the year" fractal, and how does it relate to Bitcoin's price?

The "start of the year" fractal refers to a pattern where Bitcoin's price pumps at the start of the year, followed by a sweep of December lows, before kicking off a massive uptrend.

What could happen to the crypto market if Bitcoin's price corrects?

If Bitcoin's price corrects, it could trigger a liquidation event, causing altcoins to undo their recent gains and potentially leading to a massive liquidation event.
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Akash Girimath

Senior Cryptocurrency Analyst & Market Strategist Engineer-turned-analyst Akash Girimath delivers data-driven insights on cryptocurrency markets, DeFi, and blockchain technology for platforms like AMBCrypto and FXStreet. Specializing in technical analysis, on-chain analytics, and risk management, he empowers institutional investors and retail traders to navigate market volatility and regulatory shifts. A hands-on strategist, Akash merges active crypto portfolio management with research on Web3, NFTs, and tokenomics. At AMBCrypto, he led cross-functional teams to redesign content frameworks, achieving record-breaking traffic growth through scalable editorial strategies. His analyses dissect market sentiment, investment strategies, and price predictions, blending macroeconomic trends with real-world trading expertise. Known for mentoring analysts and optimizing workflows for high-impact reporting, Akash’s work is cited across global crypto publications, reaching 500k+ monthly readers. Follow his insights on YouTube, X, and LinkedIn for cutting-edge perspectives on decentralized ecosystems and crypto innovation.

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