Why could Bitcoin reach $100,000 in the coming weeks? – London Business News | Londonlovesbusiness.com

Bitcoin is facing a challenge in maintaining levels above $90,000 this Monday, 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, in my view, is reminiscent of what happened with stocks linked to Trump.

A similar shift in the options market caused a sharp drop in those 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.

However, 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 victory of U.S. President Donald Trump, a strong supporter of cryptocurrencies, showing 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.

In my view, there are positive signs indicating the potential for Bitcoin to exceed the $100,000 level in the coming weeks. 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.

From my perspective, Bitcoin currently shows indicators suggesting it has not yet reached an overvaluation stage. Its price is still at levels that suggest 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 my analysis of realized price ranges.

However, this optimistic outlook, in my opinion, 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 suggest that Bitcoin could face pullbacks if the selling pressure from large investors and miners continues, which could create downward pressure on prices overall.

From another angle, I see that 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 former U.S. President Donald Trump could 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. This proposal could have a strong impact on Bitcoin markets and boost its value in the long run.

However, some negative signals cannot be ignored, as they could affect the sustainability of this bullish trend. 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. 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 at a crucial crossroads shortly.

In reality, 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.