BITCOIN ANALYSIS

After a strong rally pushed Bitcoin to a record $111,900, the leading cryptocurrency has pulled back. A mix of profit-taking, geopolitical concerns, and a cautious Federal Reserve outlook has triggered a 7% dip, bringing Bitcoin below $104,000.

Why Bitcoin Is Dropping

Bitcoin’s recent drop follows a 50% surge from April lows. This type of retracement is typical after large upward moves, as investors lock in gains.

Adding pressure, U.S.-China trade tensions flared up. Treasury Secretary Scott Bessent noted that trade talks had stalled. At the same time, Donald Trump criticized China for not honoring trade agreements and proposed tariff hikes on steel and aluminum.

Meanwhile, the Federal Reserve released minutes showing officials are not ready to cut interest rates. Instead, they’re holding back to evaluate how new tariffs may impact the economy.

Demand Remains Strong, Supply Shrinks

Despite the pullback, Bitcoin’s long-term outlook remains bullish. Demand is rising, especially from spot Bitcoin ETFs, which have seen over $44 billion in cumulative inflows.

GameStop and Trump Media are among the latest companies to add Bitcoin to their treasuries. On the supply side, Bitcoin is getting harder to find:

• Only 450 BTC are mined daily.
• Supply on exchanges has dropped by 57% since March 2020, from 3.22M to just 1.37M.
• Miners’ BTC holdings are now at 1.74M, the lowest since 2010.

These supply constraints combined with rising demand could drive prices higher in the long term.

Bitcoin Price Technical Outlook

Technically, Bitcoin is still in a strong position:

• It remains above its 50-day and 100-day Exponential Moving Averages (EMAs).
• A bullish flag has formed, typically a continuation signal.
• There’s also a cup-and-handle pattern, with a projected upside target of $144,650 based on the depth of the pattern.

Currently, BTC is trading around $104,170, still well above key support levels.

Bitcoin has dropped 6.4% in 24 hours, forming a rounding top pattern. This decline triggered panic selling, but long-term holders remain firm. Could BTC recover soon?

Bitcoin Falls to $91K, Triggering Market Panic

Bitcoin’s recent dip to $91,000 caused heavy selling pressure, with over 80,000 BTC (worth $7.5 billion) moving to exchanges. Historically, large inflows signal potential sell-offs, as investors seek liquidity during downturns.

However, this may be short-lived. Such panic selling doesn’t always indicate a long-term bearish trend. Instead, it reflects temporary fear-driven movements.

Long-Term Holders Stay Strong

The Coin Days Destroyed (CDD) metric, which tracks older BTC movement, shows long-term holders (LTHs) have stayed inactive despite the price drop.

This suggests they are confident in Bitcoin’s recovery. Unlike short-term traders, LTHs tend to hold through volatility, signaling that the current dip might be a temporary setback rather than a prolonged decline.

BTC Price Prediction: Will Bitcoin Bounce Back?

Bitcoin’s rounding top pattern could shift into an inverse cup and handle, which typically precedes a breakout. The current bearish momentum is not overly strong, meaning BTC could still rebound from the $93,625 support level.

Key Price Levels to Watch:

✅ Bullish Scenario: If Bitcoin recovers above $95,668, it could push toward $100,000, restoring investor confidence. A break and hold above $100K could lead to $105,000.

❌ Bearish Scenario: If BTC fails to hold support, it may drop further to $92,005 in the short term.

For a full recovery, Bitcoin needs to flip $100,000 from resistance to support, which would invalidate the bearish trend and confirm a bullish breakout.

Bitcoin (BTC) has remained steady above $100,000 for the past three days, showing resilience despite market volatility. A golden cross has formed on BTC’s Exponential Moving Average (EMA) lines, signaling a potential bullish breakout if resistance levels are breached.

However, BTC has struggled to break past $106,000. If it fails, a pullback to lower support levels could follow. The coming days will be crucial in determining whether BTC can push toward $110,000 or face a correction.

Bitcoin’s Ichimoku Cloud Indicates Mixed Signals

The Ichimoku Cloud chart presents a mixed outlook for Bitcoin.

• BTC is trading above the Tenkan-sen (blue line), suggesting short-term bullish momentum.
• The Kijun-sen (red line) is slightly lower, signaling a potential trend continuation if BTC stays above it.
• The Chikou Span (green lagging line) sits above past price action, reinforcing a bullish bias.

However, the Kumo (cloud) is thin, meaning weaker support and resistance ahead. The cloud is transitioning from red to green, often signaling a bullish shift, but the flat Senkou Span B (red boundary) suggests hesitation.

If BTC stays above the cloud, the bullish outlook strengthens. But if it dips back into the cloud, the market could enter a consolidation phase.

Whale Activity Hits Year-Low but Shows Signs of Recovery

Between January 22 and January 29, the number of Bitcoin whales (holding at least 1,000 BTC) dropped from 2,061 to 2,034, reaching the lowest level since February 2024. This suggested reduced confidence among large holders, possibly due to profit-taking.

However, whale numbers are rising again, now at 2,039. Although still low compared to previous months, this uptick could signal renewed accumulation, which may support BTC’s price in the near term.

Whale activity is a key market indicator since large holders can drive price movements. If this trend continues, BTC could see stronger buying pressure.

BTC Price Prediction: Will Bitcoin Hit $110K?

BTC’s golden cross suggests bullish potential, but $106,000 remains a key barrier. If BTC breaks through, it could test $107,000. A successful breakout could push BTC to $108,000, with momentum possibly driving it toward $110,000, setting a new all-time high.

On the bearish side, if BTC fails to hold $101,296, selling pressure could push it down to $99,486. A deeper drop could test $95,800, where buyers might step in to prevent further losses.

As traders seek upside exposure in Bitcoin (BTC), foreign exchange (FX) options indicate a continued bullish bias for the dollar index (DXY). Historically, Bitcoin has shown a negative correlation with the DXY. However, as the U.S. presidential election approaches, this dynamic could shift, according to current options pricing.

Bitcoin Options Show Bullish Bias

At the time of writing, one-month 25-delta BTC risk reversals—an indicator of market sentiment—stand at 1.20, indicating a bullish outlook for Bitcoin over the next four weeks. This data comes from the Chicago Mercantile Exchange (CME), which is seen as a key barometer for institutional activity.

The upcoming U.S. Presidential Election, set for November 5, with results expected by November 8, could play a major role in market movements. In options trading, buying a call is a sign of bullish sentiment, while purchasing a put reflects a bearish stance aimed at hedging against downside risks.

Dollar Strength Continues to Rise

Meanwhile, FX options data indicates continued dollar strength. For instance, risk reversals for the euro-dollar (EUR/USD) are currently at -0.39 on the CME, signaling concerns that the dollar will remain strong in the coming weeks. This trend also holds true for the GBP/USD pair.

The euro plays a crucial role in the dollar index, making up 57.6% of the basket. Despite this, Bitcoin has shown resilience, ignoring the dollar’s strength and climbing to nearly $68,000, its highest level since July 29.

Trump’s Odds Boost Bitcoin’s Appeal

Bitcoin’s bullish sentiment is also gaining traction due to the increasing odds of a pro-crypto Republican candidate, Donald Trump, winning the U.S. presidential race. Market participants have started to build positions in anticipation of a Trump victory.

Crypto liquidity provider Zerocap’s Chief Investment Officer Jonathan de Wet noted that the upside potential of a Trump win makes Bitcoin long positions attractive. He predicts BTC could reach $70,000 in the coming weeks, assuming no major crises disrupt the market.

Growing Interest in High-Strike BTC Options

There is strong interest among traders in Bitcoin call options, particularly with a strike price of $80,000. Currently, the most popular option is a $100,000 call, which boasts over $1 billion in notional open interest. This reflects traders’ appetite for significant upside exposure as the U.S. election looms.

According to FRNT Financial, the U.S. election has become a dominant narrative in the crypto space over the last six months. While Donald Trump has presented concrete policy proposals for crypto, the approach of a potential Kamala Harris administration remains uncertain.