Highlights:
- Bitcoin is trending higher after bouncing off key support at the start of the year
- Rally sustained by rising institutional demand for Bitcoin
- Technical indicators point to a possible rally to above $120k
Bitcoin is in the green today as excitement rises after it pushed through the $100k mark for the first time in 2025. At the time of going to press, Bitcoin was trading at $101,817.36, up by 2.71% in the day. The excitement around Bitcoin is also evident in the surge in trading volumes.
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In the last 24 hours, Bitcoin trading volumes have increased by 65% to hit a high of $47.94 billion. This is an indicator that more investors are looking into Bitcoin ahead of an expected stellar year with Trump taking office in a few days. Multiple factors already support a possible rally in the price of Bitcoin in the short term.
Bitcoin ETFs Continue to Record Strong Growth
One of them is the rising institutional interest in Bitcoin. Since December 2024, Bitcoin ETFs have experienced a surge in inflows. What’s particularly noteworthy is that in the said period, Bitcoin ETFs bought 3X the amount of Bitcoin miners have put into circulation. This rising demand from institutions can be linked to expectations of a major Bitcoin supply shock in the US once Trump takes office.
Expectations High Around Trump’s Pro-Crypto Stance
Donald Trump has promised to make Bitcoin and other cryptocurrencies a core aspect of his policy to grow the US economy. One of these is the possible creation of a Bitcoin Reserve. Institutional investors expect this to come to fruition because Republicans now have full control of both the presidency and the legislative arm of government.
Among the institutions that appear to be betting big on Bitcoin during the Trump presidency are BlackRock and Fidelity. Since the Bitcoin ETFs became a thing, these two have become major players, but are particularly upping their game this year.
BlackRock and Fidelity Record Over $500 Million in Single-Day BTC Inflows
Yesterday, January 6, BlackRock and Fidelity invested a total of $579 million into Bitcoin ETFs. MicroStrategy, another major institutional player in Bitcoin also continues to make big moves that could reflect in Bitcoin’s price going forward. MicroStrategy has been aggressively buying Bitcoin and currently holds about 447,470 Bitcoins. Top investment banks are also reporting an increase in the level of interest in Bitcoin by their customers.
Goldman Sachs for instance, expects the number of multi-national corporations holding Bitcoin in their balance sheets to keep on rising. Such a strong increase in the institutional demand for Bitcoin points to the solidifying use case for Bitcoin as digital gold. With expectations high that Bitcoin could rival gold’s market cap, the odds are high that Bitcoin could be headed much higher now that it is back above $100k, which is now acting as a key support level.
I've spoken to people who sold all their gold for Bitcoin
But I've never spoken to anyone who's sold all their Bitcoin for gold
— Rajat Soni, CFA (@rajatsonifnance) January 6, 2025
Technical Analysis – Bitcoin Bulls Take Control
From the charts, Bitcoin is already reflecting the huge expectations around its price in the short term. After a minor correction during the holiday period, Bitcoin found strong support at $92,294 on December 31, 2024. The price has been edging higher since then and is now pushing toward the $106.085 resistance.
In the event that bulls push Bitcoin through the $106,085 resistance, then a rally to new highs possibly $120k or higher could follow. Many analysts including top banks like Standard Chartered hold the view that Bitcoin could top $200k within the current crypto cycle. Such projections also limit the likelihood of Bitcoin dropping back below $100k especially now a pro-crypto administration is about to take office in the United States.
Recap
Bitcoin is back above $100k and is headed higher. From a strong bounce-off support to the rising institutional inflows into BTC, everything points to a rally to $120k or higher short term.
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