The cryptocurrency market is known for its volatility, but some analysts believe that Bitcoin’s price may be setting up for a significant breakout to $120,000. This prediction comes on the heels of a new all-time high in stablecoin reserves on Binance, one of the largest cryptocurrency exchanges in the world.
BTC Price Sees 10% Correction Before Potential Rally
According to Cointelegraph Markets Pro data, Bitcoin’s price saw a 10% correction from its previous all-time high of $108,300 recorded on December 17. This correction may be setting up for a rally, as analysts are predicting that the price could peak above $120,000 in January.
President-elect Trump’s Inauguration and Its Impact on BTC Price
The upcoming inauguration of President-elect Donald Trump on January 20 is expected to have a significant impact on the cryptocurrency market. Ryan Lee, chief analyst at Bigget Research, believes that Bitcoin’s price could peak above $120,000 during January due to increased optimism and investment in the sector.
"We’re expecting a ‘January effect’ where investors are renewed by optimism and invest more in the market," Lee told Cointelegraph. "However, profit-taking from 2024 gains may introduce market corrections, balancing bullish sentiment with caution."
Stablecoin Reserves on Binance Reach New All-Time High
One of the primary drivers of Bitcoin’s potential rally is the growth of stablecoin reserves on Binance. According to CryptoQuant data, stablecoin exchange reserves on Binance surpassed $44.5 billion on December 31, nearing the all-time high of $45.8 billion registered on December 11.
Stablecoins are a type of cryptocurrency that is pegged to the value of a fiat currency, such as the US dollar. They are often used as an on-ramp for investors entering the crypto market from traditional finance. Increasing stablecoin inflows to crypto exchanges can signal incoming buying pressure and growing investor appetite.
BTC Needs to Overcome Significant Resistance
While Bitcoin’s price may be poised for a rally, it still needs to overcome significant resistance above $95,000 and $96,400. A potential move above $96,400 would liquidate over $1.24 billion worth of leveraged short positions across all crypto exchanges, according to CoinGlass data.
Analysts Remain Optimistic About Bitcoin’s 2025 Trajectory
Despite the potential for a correction, analysts remain optimistic about Bitcoin’s 2025 trajectory. Some predict that Bitcoin’s price could rally to $160,000 driven by improving US financial policy and increased investment in the sector.
Conclusion
The cryptocurrency market is known for its volatility, but some analysts believe that Bitcoin’s price may be setting up for a significant breakout to $120,000. This prediction comes on the heels of a new all-time high in stablecoin reserves on Binance and increasing optimism and investment in the sector.
Investors Should Be Mindful of Spot Bitcoin ETF Inflows
To gauge BTC’s performance, investors should be mindful of spot Bitcoin exchange-traded fund (ETF) inflows, the performance of the US stock market, and incoming FTX repayments scheduled for January 3. These factors can have a significant impact on the cryptocurrency market and may influence the price of Bitcoin.
Key Takeaways
- The growth of stablecoin reserves on Binance is driving Bitcoin’s potential rally.
- Bitcoin needs to overcome significant resistance above $95,000 and $96,400.
- Analysts remain optimistic about Bitcoin’s 2025 trajectory.
- Investors should be mindful of spot Bitcoin ETF inflows, the performance of the US stock market, and incoming FTX repayments.
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