Highlights:
- Bitcoin is trending towards the $101,142 support level
- A crash through the $101,142 support could trigger a drop to $100k
- A slowdown in active addresses could trigger a crash despite high prices
Bitcoin is in the red today and has pulled the rest of the market intra-day. At the time of going to press, Bitcoin was down by 3.01% to trade at $101,656.20. Trading volumes are down in the day as well, down by 15.61% to trade at $61.31 billion.
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However, most analysts agree that this is part of a broader consolidation around the $100k level. What could follow from this point on is either a bullish breakout or a correction that could mark the end of the multi-month bull that Bitcoin has enjoyed since 2024 to date.
Bitcoin Active Addresses Drops Even as Prices Hold Above $100k
Bearish analysts are basing their arguments on the decline in active addresses. This has created a divergence between the price of Bitcoin at the moment and the number of players taking part in the market. One analyst named Adler notes that this divergence could be an indicator that investors are increasingly becoming cautious about the price.
However, Adler notes that the divergence could also point to a possible consolidation ahead of a major rally. In the past, the kind of price action exhibited at the moment has usually triggered parabolic price rallies, or an end of bull markets and the beginning of significant corrections. While still unsure of the direction Bitcoin could take, more investors seem to be leaning toward the possibility that the market is consolidating ahead of the FOMC.
Bitcoin Investors Awaiting FOMC Meeting for Direction
Bitcoin could remain choppy around the $100k price level until the FOMC meeting between January 28 and 29. While investors expect interest rates to remain as they are, the markets will be keen on any hints as to whether they will be cut at any time in the foreseeable future.
Congrats on surviving the first stage of fuckery.
Assuming no BoJ scam, we likely chop between 100k and 110k till FOMC end of month.
Then… idk maybe hawkish dot plot/no cut dump into dovish press conference and we get the next leg up.
Patience. https://t.co/eCBMvrsFcU pic.twitter.com/391fc7w8ZL
— krillin ॐ (@LSDinmycoffee) January 20, 2025
Analysts are in consensus that if there is any hint of a possible new round of quantitative easing, Bitcoin could go parabolic, as investors would be willing to pump money into risky assets. However, if there is no such hint, then there could be a risk of a drop below $100k until another demand trigger comes up.
4-Year Cycle Hints at Possible Parabolic Price Rally
Other analysts are keener on the Bitcoin 4-year cycle. Usually, the biggest price runs happen towards the end of the 4-year cycle. Analysts believe that the market could be at the tail end of the cycle, and that means a parabolic price rally could be in the offing. Several factors give weight to the possibility of a Bitcoin parabolic price rally in the short term.
Larry Fink Hints at Possible $700k Bitcoin
One of them is institutional money, and the backing Bitcoin is getting from big players like BlackRock. According to BlackRock CEO Larry Fink, Bitcoin is expected to hit a price as high as $700k per coin. Fink pointed to Bitcoin’s ability to hedge against inflation as the key reason why such is possible.
JUST IN: $11.5 trillion BlackRock CEO Larry Fink says Bitcoin could go up to $700,000 if there is more fear of currency debasement and economic instability.pic.twitter.com/WOXclAsjDP
— Bitcoin Magazine (@BitcoinMagazine) January 22, 2025
Such sentiments coming from a person heading a multi-trillion-dollar fund could trigger institutional FOMO into Bitcoin. It is one of the factors that could push Bitcoin to new highs in the short term, especially now the cycle points to a possible parabolic price move ahead.
Technical Analysis – Bitcoin Price Trending Towards Critical Support Level
From the charts, Bitcoin is bearish after breaking out downwards from a symmetrical triangle on January 22. Bears have been quite strong and have managed to push Bitcoin through the $102,723 support.
If the current trend, Bitcoin could drop to around $101,142 support. A drop through the $101,142 support could see Bitcoin hit $100,000 or lower in the short term.
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