3 reasons why Bitcoin price may surge to $123k in January

The Bitcoin price has fallen this week amid ongoing jitters in the bond market and a relatively hawkish Federal Reserve.

Bitcoin (BTC) fell below $95,000, triggering a steeper sell-off among altcoins. However, there are signs that the coin could bounce back and possibly reach $122,000 in January.

Bitcoin balances on exchanges are falling

One of the main reasons why BTC price rebounded in January is the ongoing imbalance between supply and demand. Demand has continued to rise this year, as evidenced by rising ETF inflows.

Spot Bitcoin ETFs have added a net $1.3 billion in assets this year, while companies like MicroStrategy also remain bullish. Bitcoin whales also continued to accumulate, adding 34,000 coins since December.

Bitcoin whales still piling in | CryptoQuant

As seen in Bitcoin balances on exchanges, the supply is also shrinking. According to CoinGlass, the number of BTC coins held on exchanges has fallen to its lowest level in years. Balances have fallen from 2.72 million in January 2024 to 2.1 million currently. Therefore, this imbalance between demand and supply may soon benefit Bitcoin.

Bitcoin balances on exchanges | CoinGlass FTX distributions and Donald Trump inauguration

Another major Bitcoin price catalyst is the $16 billion that will soon be distributed from FTX Estate to investors and creditors. Most of these funds are currently held in stablecoins such as Tether (USDT) and USD coin (USDC). While some of the buyers will convert them into cash, some will be converted into cryptocurrencies such as Bitcoin.

Additionally, Donald Trump will be sworn in on January 20, ushering in a new era of crypto regulations. While most of these have already been priced in, there is a possibility that BTC and other altcoins will surge ahead of the incident and Gary Gensler’s resignation.

Bitcoin price has strong techniques BTC price chart | Source: crypto.news

Bitcoin’s technical indicators also show further upside potential in January. On the weekly chart, BTC formed a bullish pennant pattern shown in blue. This formation consists of a triangle-shaped consolidation following a long vertical line. The recent horizontal movement is part of this pennant formation.

Bitcoin’s uptrend is supported by the 50-week and 100-week Exponential Moving Averages, which is a sign that the uptrend is solid. The Market Cap and Relative Value indicator has moved to 2.4, which means it is still cheap.

Most importantly, Bitcoin has not yet reached the goal of the cup and handle model. The cup formation has a depth of 75%. Measuring the same distance from the top of the cup indicates a target of $123,000.