Bitcoin’s Journey Toward $100,000 Stalls, but Analysts Remain Bullish

Bitcoin made a high-stakes push towards the elusive $100,000 mark last week, only to fall just short of the milestone in recent trading sessions. The six-digit threshold has proven to be a formidable resistance level and a psychological barrier for investors, according to industry insiders.

The Psychological Selling Point at $100,000

Market observers believe that the $100,000 price point triggers a wave of selling among investors who have been holding bitcoin since its previous bull run. Matt Mena of 21Shares explained that traders tend to expect price dips around this level and choose to capitalize on profits by selling portions of their holdings. This behavior mirrors past instances when bitcoin approached major price milestones, he added.

Factors Contributing to the Correction

Analysts posit that several factors may have intensified bitcoin’s recent pullback. Alex Kuptsikevich, chief market analyst at FxPro, pointed to easing geopolitical tensions and a decline in investors’ appetite for safe-haven assets like bitcoin. Additionally, Standard Chartered noted that falling US Treasury yields could be influencing the cryptocurrency market.

Predictions for Bitcoin’s Trajectory

If the current correction continues, bitcoin could potentially retreat to $80,000, according to Mena. He highlighted that options traders are also betting on this level, with December contracts heavily favoring a dip to $80,000. However, Mena believes that this correction could ultimately strengthen the market by allowing bitcoin to retest previous support levels and weed out leveraged positions.

Anticipated Rally and Key Support Levels

Despite the near-term turbulence, Mena remains optimistic about bitcoin’s performance heading into the year-end. He anticipates a seasonal uptick in demand during the holiday season, potentially propelling bitcoin to a trading range of $110,000-$120,000. Key support levels to monitor include $87,000, with a potential rebound expected thereafter, as per Standard Chartered’s analysis.

Furthermore, Mena envisions a pre-inauguration rally in January, akin to the buildup before the recent presidential election, which could provide the momentum needed to breach the $100,000 threshold. Investors are eagerly awaiting the inauguration, spurred by the president-elect’s positive stance on crypto and potential policy initiatives in the space.