The Bitcoin price may be setting up for a breakout to $120,000, bolstered by a new all-time high of stablecoin reserves on cryptocurrency exchange Binance.
BTC’s 10% Correction: A Rally Ahead?
Bitcoin (BTC) may be poised for a rally following its 10% correction from the $108,300 all-time high recorded on Dec. 17, Cointelegraph Markets Pro data shows.
BTC/USD, 1-month chart
[Image description: BTC/USD 1-month chart]
According to Ryan Lee, chief analyst at Biget Research, driven by United States President-elect Donald Trump’s upcoming inauguration on Jan. 20, BTC may peak above $120,000 during January.
Potential Correction and Profit-Taking
Bitcoin could see a local top above $120,000 before a potential correction driven by profit-taking, the analyst told Cointelegraph, adding that the new year could also bring a ‘“January effect,” characterized by renewed investments and optimism, though profit-taking from 2024 gains may introduce market corrections, balancing bullish sentiment with caution.
Key Factors to Watch: Spot Bitcoin ETF Inflows, US Stock Market Performance, and FTX Repayments
To gauge BTC’s performance, investors should be mindful of spot Bitcoin exchange-traded fund (ETF) inflows, the performance of the US stock market and incoming FTX repayments scheduled for Jan. 3, added Lee.
GMI Total Liquidity Index: A Potential Peak at $110,000
Lee’s predictions align with those of other analysts who foresee Bitcoin recapturing the six-figure price tag in January. Based on Bitcoin’s correlation with the global liquidity index, BTC could peak at a local top above $110,000 in January before a potential correction.
GMI total liquidity index, Bitcoin (RHS)
[Image description: GMI total liquidity index, Bitcoin (RHS)]
Confirmed Bitcoin Payments Hit Yearly Low Due to Holiday Illiquidity
Related: Confirmed Bitcoin payments hit yearly low due to holiday illiquidity
BTC Rally’s Primary Fuel: Binance’s $45 Billion Stablecoin Reserves
Bitcoin’s rally during January is set to benefit from nearly $45 billion worth of stablecoins awaiting deployment. Stablecoin reserves on Binance surpassed $44.5 billion on Dec. 31, nearing the $45.8 billion all-time high registered on Dec. 11, CryptoQuant data shows.
Stablecoin exchange reserves, Binance
[Image description: Stablecoin exchange reserves, Binance]
On Dec. 11, BTC gained over 4.7% intra-day to close above $101,000, driven by stablecoin reserves.
BTC/USD, 1-day chart
[Image description: BTC/USD 1-day chart]
Increasing stablecoin inflows to crypto exchanges can signal incoming buying pressure and growing investor appetite, as stablecoins are the main investor on-ramp from fiat to the crypto world.
Overcoming Significant Resistance
Still, Bitcoin needs to overcome significant resistance above $95,000 and $96,400. A potential move above $96,400 would liquidate over $1.24 billion worth of leveraged short positions across all crypto exchanges, CoinGlass data shows.
Bitcoin Exchange Liquidation Map
[Image description: Bitcoin Exchange Liquidation Map]
Analysts Remain Optimistic About 2025 Trajectory
Analysts remain optimistic about Bitcoin’s 2025 trajectory, with some predicting a Bitcoin rally to $160,000 driven by improving US financial policy.
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