Bitcoin Price Analysis: Why BTC Could Reclaim $100k Soon

Highlights:

• Bitcoin has reclaimed $90k but is still trading within a broader range
• A rally through the $96,881 resistance could send BTC to $105,873
• Trump’s change in tone on Greenland could send Bitcoin through resistance 

Bitcoin (BTC) is showing signs of a rebound today. At the time of writing, Bitcoin was trading at $90,092, up by 0.65% intraday. While there is a slight uptick in the price, trading volumes have dropped during the day. When writing, Bitcoin trading volumes stood at $51.89 billion, down by 1.97% in the day. This slight drop in volumes can be interpreted in two ways. 

First, it could mean that despite the overall weakness in the market, the average Bitcoin holder is not selling and expects the price to do even better over time. However, it could also mean that new investors are not keen on buying yet and are likely waiting for a clearer price breakout. Both sides of the trade have valid reasons behind them.

Macro Environment Favors BTC Rally Despite Ongoing Uncertainty

For starters, there are multiple reasons why long-term holders are not keen on selling Bitcoin on every uptick. One of them is that the macro environment is likely to get better. That’s despite the cloud of uncertainty hanging over the markets at the moment. One of the biggest factors that has caused market uncertainty was the recent threat by President Trump to take Greenland by force. However, the US president seems to have toned down on this rhetoric.

While speaking during the World Economic Forum in Davos, President Trump made it clear that while the US had every intention to make Greenland a US state, it would not use force while doing so. This has lowered fears of a war in the North Atlantic, a move that would crash markets were it to happen.

Still on the macro environment, there is a high chance that rates could keep going lower in the US going into the foreseeable future. While the Federal Reserve’s key policymakers sent mixed signals when cutting rates in December, something fundamental is about to change.

The US is set to get a new Federal Reserve Chairman, and President Trump is likely to go with a dovish chairman. A dovish Fed would mean more rate cuts this year and more liquidity injection into the market. The result is that Bitcoin and other risk-on assets that benefit from low interest rates could rocket to new highs. 

Institutional Buying Likely to Push Bitcoin Higher Long Term

Institutional adoption of Bitcoin is also on the rise, and could add to the upside price pressure. One of the big institutional players buying up Bitcoin is MicroStrategy. Data shows that in the past week alone, Michael Saylor and his company, Strategy, bought over $2 billion worth of Bitcoin. Such heavy purchases could help drive the price higher, especially because of Bitcoin’s low and capped supply.

Macro Fear Could Keep Retail Buyers Away In The Short Term

Despite all these factors supporting an upside, retail hesitance to buy Bitcoin has a solid backing to it as well. The macro environment remains volatile, especially now that a lot of policy decisions depend on what President Trump says. If he fails to reach an agreement with Denmark on Greenland and makes new threats of a forceful takeover, markets could crash again. Overall, as long as no new surprises come up in the geopolitical space, Bitcoin could be headed higher. 

Technical Analysis – BTC In A Broad Consolidation

Bitcoin is currently trading in a broad consolidation between the $96,881 resistance and $85,302 support. If bulls take control and push Bitcoin through the $96,881 resistance, a rally to $105,873 could follow.

On the other hand, if bulls fail to push Bitcoin through resistance, two scenarios could follow. The first is a possible continuation of the range-bound trading that is currently ongoing. The second is where markets panic, and Bitcoin drops through the $85,302 support. In such a case, a correction to prices as low as $80k could follow in the short term. Of these scenarios, a rally to $105,873 is more likely due to the toning down of the rhetoric of a war within NATO.