Skip to content

Bitcoin price approaching crucial crossroads as miners sell

Bitcoin price approaching crucial crossroads as miners sell

Bitcoin is facing a challenge in maintaining levels above $90,000 this week, as Deribit options market data suggests an increased likelihood of a price pullback. This reflects growing conviction among traders that Bitcoin could experience a short-term decline, which is reminiscent of what happened with stocks linked to Trump.

A similar shift in the options market has caused a sharp drop in so-called ‘Trump’ stocks’ prices. Furthermore, comments from Federal Reserve officials, such as Jerome Powell’s remarks on the lack of an urgent need for further monetary policy easing, have amplified concerns about downward pressure on risk assets, including cryptocurrencies. But could this be creating a buying opportunity for latecomers to get into BTC?

Will Trump be the saviour of crypto?

Optimism persists among traders betting on a bullish wave that could push Bitcoin beyond the $100,000 mark. The cryptocurrency has risen by more than $20,000 since the Trump victory, as he is known to be a strong supporter of cryptocurrencies. It also shows strong backing from investors for the market.

With Bitcoin currently trading around $90,460, the market remains in a state of anticipation, with its future direction depending on a mix of factors, including geopolitical developments and expectations surrounding monetary policies. This leaves markets poised for sharp moves in either direction.

Can Bitcoin break through $100,000?

“In my view, there are positive signs indicating the potential for Bitcoin to exceed the $100,000 level in the coming weeks,” said Rania Gule, a currencies analyst with XS.com. “However, this optimism is still accompanied by warnings about potential price retracements due to increased selling pressures shortly. This reflects a state of volatility that could impact investments in this cryptocurrency.”

Gule says Bitcoin currently shows indicators suggesting it has not yet reached an overvaluation stage. Its price is still at levels that indicate it is far from the price inflation limits typically associated with asset peaks.

Metrics like the Market Value to Realized Value (MVRV) ratio indicate that Bitcoin is still in a position to grow further before approaching a warning point. This supports the possibility that the currency could reach new record levels, perhaps even surpassing $100,000 in the coming weeks, based on analysis of realized price ranges.

Bitcoin futures trading volume is picking up

This optimistic outlook may be short-lived, especially with increasing indicators that suggest sharp price volatility could occur shortly. The rise in futures trading volume, particularly on exchanges like Binance, is one factor that may drive the market into unpredictable fluctuations.

Typically, when Bitcoin derivatives trading volume increases significantly, market volatility intensifies, which could lead to sharp price corrections. Additionally, some pundits suggest that Bitcoin could face pullbacks if the selling pressure from large investors and miners continues, which could create downward pressure on prices overall.


Some fundamental factors could contribute to strengthening Bitcoin’s bullish momentum. Among these is the idea that Bitcoin represents a shift in the market amidst volatile global political and economic conditions, especially given expectations that the potential return of Trump could see him push for a strategic reserve of Bitcoin in place of gold.

“While this idea seems distant, it might gain acceptance among some investors who view Bitcoin as a hedge against global economic risks,” says Gule. “This proposal could have a strong impact on Bitcoin markets and boost its value in the long run.”

Bitcoin miners cutting holdings

According to data from CryptoQuant, it appears that some miners have started to reduce their Bitcoin holdings after the price surge. The Miner Position Index (MPI) shows that Bitcoin miners have begun withdrawing significant amounts of the coins from their wallets, which serves as a signal that the currency might have reached the peak of the current price cycle, just short of the magic $100k. If these moves from miners continue, selling pressures in the market may intensify, contributing to a price decline.

Additionally, data from Lookonchain indicates that some Bitcoin whales and crypto investors have begun depositing large amounts of Bitcoin on exchanges like Binance, which could create a price-pressuring environment if these deposits continue or intensify in the coming days. With all these influencing factors, it seems Bitcoin is set to reach a crucial crossroads shortly.

This analysis reveals a complex mix of cautious optimism and potential volatility. While there are signs that Bitcoin may continue its upward trajectory toward higher levels, some risks remain that could lead to sharp pullbacks in the market. Therefore, the best course of action for investors is to exercise caution and vigilance during this period marked by unprecedented market fluctuations.

Share this article

Invest with these platforms

Hargreaves Lansdown

IG

Interactive Brokers

Interactive Investor

Charles Stanley

IG

Interactive Brokers

Charles Stanley

Looking for great investing ideas? Get our free newsletter.
Join our UK news channel on WhatsApp

This article does not constitute investment advice.  Do your own research or consult a professional advisor.

Learn with our free 'How to' Guides

Our latest in-depth company reports

On the podcast

Sign up for great investing stock tips

Thanks to our Site Partners

Our partners are established, regulated businesses and we are grateful for their support.

Aquis
CME Group
FP Markets
Pepperstone
Schroders

TMX
WisdomTree
ARK
FxPro
CMC Markets
Back To Top