Bitcoin is still growing leaps and bounds setting new highs every few days in its current price discovery phase. After setting a new all-time high on Christmas, the flagship crypto did not stop there. During the Asian hours on December 26, bitcoin surged and briefly surpassed the $25K mark setting a new high at $25,013.
However, the crypto has receded slightly since then and it seems like it is consolidating gains above $24,700. After the latest strong rally, traders, analysts, and investors are looking at all short-term bear and bull scenarios.
Currently, the market sentiment around bitcoin remains highly positive although there are some worries put forward by analysts in the foreseeable future and as a result, the next move is not quite clear-cut.
Volatility was quite high as the previous all-time high of $24,670 just gave way before resistance resumed in the market. Based on exchange order book data, the sellers are ready at $25,000 and that area is currently forming a strong psychological barrier that is under growing attack from the bulls.
For now, it is highly speculative to determine where the price of bitcoin will head from here. Nevertheless, multiple levels must remain strong for this rally to continue. Additionally, many indicators can be crucial for the analysis of different charts and projecting possible zones of interest in price discovery.
The next level of interest for BTC price has formed around $25,800, the 2.618 Fibonacci level from earlier daily price movements. That zone might be the next marker for a possible peak.
In most cases, vertical rallies are not sustainable for long. Hence, a correction might happen rapidly at some point. But, projecting when that crash/correction may happen is anybody’s guess as bitcoin may easily and speedily explode to $30,000 and then record a 30% correction.
The Near Term Bitcoin Bull Case
At the moment, it is clear that the short-term bull case for the bitcoin market is based on altcoin profits cycling into bitcoin and institutional adoption and accumulation. Both of these trends are still ongoing with inflows into Grayscale continuing to increase as the altcoins lag behind bitcoin.
The CEO of CryptoQuant, Ki Young Ju, believes that bitcoin will correct when institutional buyers slow down on their buying spree. But until then, which can be determined by assessing CME future data and Grayscale’s assets under management, Ju maintains his bullish bias:
“When institutional buying stops, the price will be likely to fall sharply. The new ATH would be determined by institutional investors when they stopped buying $BTC. Till then, I’ll keep my bullish bias.”
Grayscale’s total assets under management hover around $16.3 billion. A huge chunk, over $14 billion, of that amount comes from the Grayscale Bitcoin Trust (GBTC). For the last several months, the AUM of GBTC is considered a dependable metric that gauges the institutional sentiment around bitcoin since it is normally the first point of entry for the institutional investors into the bitcoin market, especially in the United States.
That combination of the major institutional accumulation of bitcoin together with the drying liquidity of the altcoin market supports the current short-term bull case for BTC. One on-chain market analysis firm, Santiment, tweeted:
“Liquidity has decreased rapidly in the vast majority of #crypto assets outside of $BTC and $ETH as the year is coming to a close.”
This means that most of the interest in the crypto space is mainly concentrated around bitcoin. According to Material Indicators’ exchange heatmaps, the next major resistance levels for BTC are located at $25,000 and $30,000. Thus, if bitcoin breaks sustainably above $25K, it can surge towards $30K rapidly.
There are stacked sell orders that have formed above these two psychological levels. They may result in a temporary pullback after these resistance zones are breached. But until that happens, with increasing institutional demand and the altcoin market seeming lagging, the sentiment surrounding bitcoin remains highly positive.
