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Bitcoin is currently trading below the key $100,000 threshold, facing challenges amid low market liquidity during the holiday season.
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Despite this downturn, experts predict that a surge above $105,000 could occur shortly after the holidays, driven by expected institutional interest.
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Ryan Lee, chief analyst at Bitget Research, remarked: “Post-Christmas, market activity typically picks up again… The expected trading range for BTC this week is $94,000 – $105,000.”
Bitcoin is hovering under $100,000 amid holiday challenges, yet analysts foresee a potential rally above $105,000 post-holidays fueled by institutional activity.
Bitcoin Recovery Expected Post-Holiday as ETFs Struggle
While Bitcoin aims to reclaim the crucial six-figure price point, its current price movement is notably constrained by the ongoing decline in US spot Bitcoin exchange-traded funds (ETFs). Recent data indicates that Bitcoin ETFs experienced a significant outflow, marking a four-day streak of losses, totaling over $338 million on December 24.
The ETF inflows have historically played an integral role in driving Bitcoin prices upward, particularly as they constituted approximately 75% of new Bitcoin investments. This dynamic was evident when Bitcoin’s price surged past the $50,000 benchmark earlier in the year.
Bitcoin Funding Rate Signals Buyer Dominance
Interestingly, a promising indicator for Bitcoin’s future is its current funding rate, measured at 0.0100% on Binance, the largest cryptocurrency exchange. This positive funding rate indicates a market leaning towards buyers, as it represents the fees buyers pay sellers to maintain positions in the futures market. Such dynamics reflect a bullish outlook among traders willing to support the asset despite short-term challenges.
Technical Analysis Highlights Potential for Extended Correction
However, the landscape is not entirely optimistic. Technical analysis from prominent crypto analysts, such as Rekt Capital, suggests a cautious approach, stating: “Bitcoin showed some signs of a relief rally after which price was rejected to almost new lows… overall, as long as the previously lost supports turn into new resistance – additional downside should be expected.” This caution underscores the complexity of Bitcoin’s current market conditions.
Furthermore, analysts remain hopeful for Bitcoin’s recovery trajectories, with potential macroeconomic improvements pushing the price to as high as $160,000 by 2025, as noted by crypto services provider Matrixport. This potential rally underscores a longer-term bullish sentiment despite short-term volatility.
Conclusion
In summary, Bitcoin is currently navigating through a critical phase, attempting to rebound from its recent lows below $100,000. Analysts expect a recovery above $105,000 could materialize post-holiday, especially as institutional interest returns to the market. Meanwhile, the decline in Bitcoin ETFs and technical indicators suggest remaining cautious. As the year progresses, the interplay of market conditions, regulatory developments, and macroeconomic factors will likely shape Bitcoin’s trajectory, highlighting the need for traders to stay vigilant.
