Bitcoin Re-Claims $102K Mark as Analysts Warn of Potential Pullback

After a shaky end to 2024, the past few days have been good for Bitcoin, price-wise. The number one crypto has climbed back over the US$100k hurdle, trading for US$102,235 (AU$163,861) at the time of writing, a solid 10% increase week-on-week.

Related: BlackRock’s IBIT Bitcoin ETF Sees Record Largest Single-Day Outflow

The price increase comes as the whole crypto market moves up, with The Sandbox (SAND) and Worldcoin (WLD) making the largest 24-hour gains with 8.6% and 7.6% respectively.

Can Bitcoin Set a New ATH in January?

The question on many investors’ minds is then: can BTC break the all-time high (ATH) it set just before Christmas on December 18? That day Bitcoin surged to an unprecedented US$108,268 (AU$173,548), but retreated around 14% over the following days.

Analysts at Bitfinex believe that although a larger pullback is still in the cards for Q1 of 2025, “Bitcoin is well-positioned for further gains in the medium term”.

In a recent report, the analysts explained that the Liquidity Inventory Ratio has significantly decreased indicating a sharp reduction in readily available Bitcoin.

The Liquidity Inventory Ratio, […] has plummeted from 41 months in October to just 6.6 months. This indicates a rapid tightening of available Bitcoin liquidity, and has been particularly evident during the strong rallies seen in Q1 and Q4 of 2024.

Bitfinex

The Liquidity Inventory Ratio measures how long the current Bitcoin supply can satisfy market demand.

Additionally, Bitcoin miners, who typically sell their holdings during periods when rewards are halved (known as halving years), have been retaining their coins rather than selling them, the analysts added.

This change is due to the miners’ high unrealised profits, leading to a decrease in the amount of Bitcoin they send to exchanges, which are now at the lowest levels in several years.

In simple terms, their analysis suggests that the recent dip was somewhat cushioned by lower selling pressure by miners and a decrease in Bitcoin availability due to the rapid tightening of liquidity.

What Does the Future Hold for the BTC Price By the End Of 2025?

And beyond the first quarter? Analysts at Bernstein think we’ll see US$200k per Bitcoin by the end of the year. Their view is based on what they call the “Infinity Age”.

Related: JPMorgan: ‘Debasement Trade’ Elevates Gold and Bitcoin in Investor Portfolios

And no, that has nothing to do with Avengers: Infinity War. Gautam Chhugani, a Bernstein analyst, explained that what they mean here is the broad and widespread adoption of crypto until it’s “no longer controversial — just part of the financial system built for the new intelligent age”. 

Considering that banks, pension funds and other financial institutions are eyeing crypto in one form or another, that US$200k target is not that kooky any longer.