Bitcoin’s recent price correction has sparked debates among analysts and investors about its potential trajectory. After briefly retesting $99,000, Bitcoin’s price momentum has slowed, raising questions about whether this signals the start of a larger sell-off or a temporary pause in its uptrend.
Analysts Highlight BTC Price Key Levels
Crypto trader Ali Charts has put a lot of emphasis on the $96,000 level. He explained that if Bitcoin price moves below this level, the following significant points will be $90,000 and $85,000. This view is consistent with the historical Fibonacci levels of retrace commonly employed by traders to understand market reversals.
“Keeping it simple, based on the Fib, if Bitcoin loses $96,000, the next focus becomes $90,000 and $85,000,” Ali tweeted.
To this, Robert Kiyosaki, a supporter of Bitcoin, said that it is never too late to join the market. He pointed to Bitcoin’s stability and capability to generate riches, saying, “Bitcoin is designed to make everyone rich, including those who come in late. Just don’t get greedy.”
Long-Term Holders Take Profits as Short-Term Investors Step In
Using data from Glassnode, some changes have been observed in the activity of long-term Bitcoin holders (LTHs). In the two months period, the total supply held by LTHs has been decreasing from $14.23 billion to $13.31 billion.
This comes as BTC price soared from $58,000 to over $100,000 suggesting that institutional investors are booking profits at local highs.
However, these sales by the long-term holders have been taken by the short-term holders (STHs) to ensure that the prices are maintained. Glassnode analysts pointed out that “the share of wealth owned by new investors has not yet reached the levels that were seen during the previous cycle peaks” which may mean that there is still some room for growth.
Bitcoin’s Bullish Momentum Remains Intact
However, based on the correction, some analysts continue to hold the view that the price of Bitcoin is still bullish. The AVIV Ratio, which looks at unrealized profits, is at 1.81, far from the levels that are considered extremely high and which usually signify a reversal in market trends.
This means that although some traders may have taken their profits, the market has not become overly aggressive.
Meanwhile, the Titan of Crypto still has the positive outlook about Bitcoin’s future. He stressed that Bitcoin has been making higher highs and higher lows which is a positive indication that the trend remains bullish. ”BTC bullish momentum remains strong, with the next target at the 100% Fibonacci extension of $113,000,” he stated.
Institutional Demand Could Propel Bitcoin Further
The adoption of Bitcoin has remained strong, with Bitcoin ETFs hitting a top of $37 billion in assets by December 19th. This represents a sharp rise from the $24.23 billion at the beginning of November as highlighted by Farside Investors.
At the same time, statistics show that at the peak of Bitcoin at $108,000, 62.17% of traders had short positions, expecting the price to fall. However, as Bitcoin dropped to $96,000, the sentiment changed as 55.44% of the traders are now bullish because they anticipate a rally in the price of the cryptocurrency.
Supporting this price trend, analysts at Bitfinex believe that the price correction of Bitcoin will be relatively mild owing to the rising demand from institutional investors. They expect it to be at $145,000 by mid-2025, with a possibility of rising to $200,000 in a better environment.
Furthermore, in light of the growing talk about the potential of Bitcoin as a strategic reserve asset at the national level, experts estimate that such a decision could take Bitcoin’s price to $1 million.
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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