In the first quarter, Bitcoin could hit a record high above $125,000 or fall to around $77,000. One analyst said that the key will be whether new President Donald Trump keeps his promises to the crypto business soon after he takes office.
If you look at Dow Jones Market Data, the biggest cryptocurrency, BTCUSD +0.01%, hit a record high of $108,309 on December 17. Since then, it has been shaky below the $100,000 mark.
John Glover, chief investment officer at crypto lending platform Ledn and a former managing director at Barclays Investment Bank, says that the Elliott wave theory, a tool for technical analysis, shows that bitcoin will drop to $89,000 before it goes over $125,000 in the first quarter of 2025.
According to Elliott wave theory, the price of an object goes through five waves that move in the same direction as the main trend and three waves that move in the opposite direction to correct the trend. Each corrective wave comes after a wave that moves in the same way as the main trend.
Glover told MarketWatch over the phone, “We saw bitcoin drop below $92,000 earlier this week, so we might have already finished the corrective wave before heading towards $125,000.”
Glover pointed out that if bitcoin breaks above $125,000, it might have another drop before it goes to a cycle high near $160,000.
Glover said that while crypto bulls wait for Trump’s election on January 20, bitcoin may go down before then as investors clean up their books.
People who are bullish on crypto think that regulations will get better if Trump wins the election. People are waiting to see if the new president will soon keep his promises to the crypto industry, especially his promise to build a strategic bitcoin reserve in the U.S., though he hasn’t said what those plans are yet.
Glover said that bitcoin may go down if Trump doesn’t do anything to keep his word in the beginning, especially in his first 100 days in office. Politicians and analysts often use the first 100 days of a new president’s term to judge how successful and influential they will be.
Glover pointed out that because of the way the technology works, bitcoin is not likely to fall below $77,000.
According to analysts at blockchain data platform Glassnode, investors should also keep a close eye on the level of $87,000, which is the short-term holder cost base for bitcoin if the cryptocurrency is fairly valued. This type of “onchain” analysis studies data directly recorded on a blockchain network to gain insights into market trend or investor behaviors.
There is a gap of demand for bitcoin’s price between $87,000 and $71,000, which makes the former a “make-or-break” level for bitcoin’s short-term price, the analysts added. The level serves as support during uptrends; however, if it is broken decisively, bitcoin’s price can flip to resistance, indicating a shift in sentiment, according to the Glassnode analysts.
According to analysts at QCP Capital, another important thing that could boost bitcoin in January is when banks rebalance their portfolios. Hedge funds and asset managers often rebalance their investments in January to plan their strategies for the year, make changes based on market conditions, and get the best tax results.
More institutions started to use bitcoin last year after spot bitcoin exchange-traded funds were introduced, and this year, more money is likely to be put into bitcoin. This is because strategists think that regulations will improve the setting for crypto, as noted by QCP analysts.
