Key factors holding back BTC and potential risks

Bitcoin price rebounded from more substantial drops earlier this week that took it to a monthly low, but is still struggling to get back into six-digit territory.

With the weekly close just hours away, here are the potential risks the cryptocurrency faces if it remains below this coveted level.

Will BTC close below $100,000?

The last few weeks of 2024 were quite painful for BTC as its price fell from its last all-time high recorded on December 17 of over $108,000 to $91,300 in days. The latter came on December 30 and marked the asset’s lowest price in more than a month.

However, bitcoin reacted well to this correction and is now above $98,000. This represents a 7.5% increase from that low. On a weekly basis, BTC is up 3.5% compared to last Sunday’s valuation.

Perhaps the most important factor keeping bitcoin below $100,000 now is the “rigid supply wall” that appears at its current levels. This means that many investors have built up their BTC holdings at prices between $98,000 and $100,000, essentially turning these levels into critical resistance lines, according to Ali Martinez.

#Bitcoin $BTC it faces a stiff supply wall between $98,000 and $100,000 which is currently acting as resistance! pic.twitter.com/GrDNNATLgT

— Ali (@ali_charts) January 4, 2025

On the other hand, the same analyst highlighted a very bullish development for BTC, which occurred at the end of 2024. More than 48,000 BTC (valued at $4.7 billion at current prices) were withdrawn from exchanges, reducing thus the immediate selling pressure.

More than 48,000 #Bitcoin $BTC have been delisted from exchanges last week, valued at over $4.5 billion! pic.twitter.com/V1agc0EtCe

— Ali (@ali_charts) January 3, 2025

Where will we go next?

Martinez believes that BTC could retest the 50-day moving average, which is currently just below $97,000. Although bitcoin is currently above this level, a close is needed, which will be “crucial to signal the end of the correction and confirm the bullish momentum.”

#Bitcoin $BTC remains at a critical point. This could just be a retest of the 50-day MA before a possible move down. A sustained close above the 50-day MA is essential to signal the end of the correction and confirm bullish momentum. pic.twitter.com/ppfEjfoJkc

— Ali (@ali_charts) January 3, 2025

The analyst told his more than 100,000 followers on X that he remains “cautiously optimistic” that the cryptocurrency could be forming a head and shoulders pattern that could lead to an even more violent decline to $78,000. In his latest post, Martinez emphasized that BTC needs to close above $100,000 to invalidate this bearish setup, which is currently not the case.

I am cautiously optimistic because as far as we know, #Bitcoin $BTC it could be forming a head and shoulders pattern that predicts a correction to at least $78,000. That’s why a strong close above $100,000 is crucial to invalidating this bearish setup. pic.twitter.com/2O1y3sEWgq

— Ali (@ali_charts) January 4, 2025

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