Key Takeaways
Yesterday, Bitcoin (BTC) briefly surged past $102,000 before dipping slightly below the threshold, and marks the first time BTC has reclaimed this level since Tuesday, Jan. 7.
This price increase has happened because of several factors. First, the U.S.- president’s inauguration, scheduled for Jan. 20, has drawn much attention to Bitcoin and the crypto market.
One reason for this is the anticipated executive orders that Donald Trump could declare on the mentioned date. But beyond that, several other things are happening behind the scenes that could work in BTC’s favor.
Some of them indicate that Bitcoin prices could hit a new all-time high in the coming days.
Some days back, Bitcoin price dropped below the $90,000 mark, causing panic that the cryptocurrency could be heading for capitulation. However, that did not happen, as the price has now surged above $100,000.
This rebound is not disconnected from Trump’s inauguration next week. During his campaign, the incoming president promised to ease the crypto market’s regulatory challenges.
True to his words, multiple reports have suggested that Trump might make this one of his first moves when he is inaugurated.
With support from U.S. Senator Cynthia Lummis and many other crypto executives, the New York Times revealed that he could declare a Bitcoin Reserve on his first day.
If this happens, demand for BTC might increase, driving the price above the $108,268 all-time high it reached on Dec. 17.
From an on-chain perspective, Santiment data showed that the Market Value to Realized Value (MVRV) ratio has returned to the positive region.
This ratio helps assess whether Bitcoin’s price has hit the cycle top or is close to the bottom. Typically, extremely high values indicate a local top, while low ones signify that there is room for growth.
As of this writing, the MVRV ratio is 5.25%, far below the average of 20%, which sometimes leads to a drawdown. With this position, Bitcoin’s price is likely to experience an extended upward movement in the short term.
Interestingly, an on-chain analytic platform also agrees that Bitcoin might hit higher values this year. In its extensive report on Jan. 14, the firm noted that institutional interest in the cryptocurrency, as well as some other factors, could be vital to the rally.
“Bitcoin could be targeting a price of $145,000-$249,000 in 2025 driven by institutional capital flows, in the context of favorable regulatory environment, accommodative monetary policy in the U.S. and historical cyclical patterns.” The CryptoQuant report stated .
Furthermore, an assessment of the In/Out of Money Around Price (IOMAP) also seems to align with the thesis. The IOMAP gives an idea of support and resistance levels depending on the volume of coins held in unrealized profits or losses.
The higher the volume of profits, the stronger the support. But when the volume of unrealized losses outweighs those in gains, it indicates notable resistance.
According to IntoTheBlock, Bitcoin price is currently trading at a zone where over 1 million addresses purchased nearly 820 million coins. This volume is higher than the volume accumulated between $101,817 and $106,839.
With a slight increase in buying pressure, BTC will likely surpass these levels and rally to a new all-time high in the short term.
Meanwhile, the technical outlook also reinforces the signs on-chain data has shown. Between Dec. 17 and Jan. 16, the daily chart shows the formation of a descending trendline.
This trendline appeared as a result of three rejections that Bitcoin faced. At one point, BTC was rejected at $106,181. Later, it faced a similar fate around $102,184, and more recently, 100,580.
However, as of this writing, Bitcoin has broken out of the bearish formation. The cryptocurrency has also risen above the 20-day Exponential Moving Average (EMA), which is bullish for the price.
If sustained, the BTC price could rally to $108,422 in the short term. A run toward $120,000 could also happen if demand for the cryptocurrency surges beyond expected levels.
However, if selling pressure increases or Trump’s inaugural speech fails to include Bitcoin, the prediction might not come to pass. Instead, BTC could experience a pullback to the 0.236 Fibonacci retracement level at $93,617.