Bitcoin (BTC) may be gearing up for a significant rally, potentially reaching $120,000 in January 2024, fueled by a mix of market dynamics and stablecoin inflows. Following a 10% correction from its $108,300 all-time high on December 17, BTC’s price has shown resilience, setting the stage for another potential surge. According to Ryan Lee, chief analyst at Biget Research, the upcoming inauguration of U.S. President-elect Donald Trump on January 20 could add further momentum to Bitcoin’s price action.
Lee suggests that Bitcoin could break above $120,000, marking a local top before facing a correction due to profit-taking. This potential rally aligns with what Lee describes as the “January effect,” a period traditionally characterized by renewed investments and investor optimism as the new year begins. However, he cautions that profit-taking from 2024’s gains may trigger a market pullback, which could introduce caution amidst an otherwise bullish sentiment.
Factors to watch include Bitcoin’s performance on crypto exchanges, particularly the influx of spot Bitcoin exchange-traded fund (ETF) inflows, as well as the broader performance of the U.S. stock market. Lee also highlights an upcoming milestone for the crypto market, with FTX repayments scheduled for January 3, which may influence short-term price movements.
A crucial catalyst for Bitcoin’s rally could be the massive $45 billion in stablecoin reserves on Binance, the world’s largest cryptocurrency exchange. As of December 31, Binance’s stablecoin reserves neared a new all-time high of $45.8 billion, just shy of the previous peak in mid-December. Stablecoins, which serve as a bridge from fiat to crypto, are instrumental in driving market liquidity, and their growing presence on exchanges signals a potential surge in buying pressure.
On-chain data shows that if Bitcoin moves past the $96,400 mark, it could trigger the liquidation of over $1.24 billion in short positions across crypto exchanges, further fueling upward momentum.
Also Read: Tether Moves $780M in Bitcoin to Reserve, Marking Its Largest Shift in 9 Months
As analysts remain bullish on Bitcoin’s 2025 outlook, predicting a potential rally to $160,000, the current conditions, including the strong inflow of stablecoins and the broader market sentiment, set the stage for a breakout in early 2024. Investors should closely monitor these key factors to gauge Bitcoin’s next major price movements.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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