Some traders believe that a technical correction and reversal in Bitcoin’s price is nearing completion, which could trigger a full-scale bullish rally.
As the market reopens after the holiday break, and with Donald Trump’s upcoming inauguration as U.S. president, positive sentiment is building for Bitcoin and the broader cryptocurrency market. Bitcoin has seen a 10% increase over the past week, reclaiming the $102,000 level late on Monday, and recovering nearly all the losses from early December. After reaching a high of nearly $109,000 on December 17, it dropped to just below $92,000 by December 30, sparking brief concerns of a deeper market decline.
The recent surge coincides with a major influx of capital into U.S.-listed spot Bitcoin exchange-traded funds (ETFs), which attracted $987 million on Monday—the highest daily inflow since November 21, according to data from SoSoValue. Fidelity’s FBTC led the way, with $370 million in inflows, followed by BlackRock’s IBIT at $209 million and Ark Invest’s ARKB at $71 million. A total of nine out of twelve ETFs recorded inflows, marking a standout day for the sector.
The anticipation surrounding Trump’s proposed crypto policies and broader economic plans has reignited positive market sentiment, pushing Bitcoin prices higher, a typical precursor to an altcoin rally.
“We see the demand for Bitcoin returning after a subdued outlook from the Federal Reserve in late December slowed the Santa Claus rally,” said Jeff Mei, COO of crypto exchange BTSE, in a Telegram message to CoinDesk on Tuesday. “Now that traders have returned from their holidays, Bitcoin, crypto, and stocks are all seeing renewed bullish activity as we approach Trump’s inauguration,” Mei added.
Some traders are eyeing the $109,000 level as a short-term target, with the expectation that a sustained bullish trend will follow, potentially leading to even higher prices.
“The technical picture suggests that the correction is nearing completion, with growth likely to resume from the 61.8% Fibonacci retracement level of the rally that began in November,” said Alex Kuptsikevich, Chief Market Analyst at FxPro, in an email. “This would be confirmed if Bitcoin breaks through the previous high of $109,000. We also expect Bitcoin’s growth to accelerate once it surpasses the $100,000 mark.”
Fibonacci levels are a popular technical analysis tool used to identify potential support and resistance levels where price movements may stall or reverse. Some traders believe that monitoring these levels can provide predictive insight, potentially influencing market behavior.
Market volatility is expected to remain low until the release of the U.S. Nonfarm Payrolls (NFP) report on Friday, which many believe will mark the official start of the new trading year, as “decision-makers are fully back at work,” according to Augustine Fan, Head of Insights at SOFA.
Stronger-than-expected NFP data could strengthen the U.S. dollar, potentially leading to higher interest rates, which could negatively affect risk assets like stocks and Bitcoin.
“However, the most significant event for market volatility this month is expected to be the Federal Open Market Committee (FOMC) meeting at the end of January, where economic data is likely to show signs of a ‘soft landing’,” Fan added.
At the time of writing, Bitcoin is trading just above $101,600 in the Asian morning session on Tuesday, up 2% in the last 24 hours. The broad-based CoinDesk 20 index, tracking the largest cryptocurrencies by market cap, is up by 0.53%.
