Bitcoin price hits $23K as on-chain analyst says $55K is the ‘next landmark’

The price of Bitcoin has cut through another critical resistance range putting $100,000 in play, on-chain data suggests.

The Bitcoin price (BTC) has surpassed the $21,000–$22,000 resistance range to rise above a new high of $23,000 on Dec. 17. Meanwhile, on-chain analyst Willy Woo now says $100,000 is a “ridiculously low” target.

BTC/USD weekly chart (Bitstamp). Source: Tradingview

The $21,000 level was particularly important for Bitcoin to continue its rally in the near term. Exchange heatmaps showed stacked sell orders at around $21,000 to $21,500, which meant BTC price had to break through to see a broader uptrend.

The Bitcoin Top Cap Model puts $100,000 as a conservative target. Source: Woobull.com

Bitcoin enters price discovery

Exchange heatmaps show no visible resistance levels and areas with large sell orders above $22,000. In the short term, this means the probability of BTC continuing its rally is high.

Due to the optimistic market sentiment and the sell-side crisis, Woo said the BTC Top Cap Model shows $100,000 is a “ridiculously low target.” He said:

“We are not at the all-time-high juncture where the BTC Top Cap Model starts curving upwards. Let’s see how high she runs in 2021. $100k is a ridiculously low target at the current trajectory. $55k is the next landmark -> Bitcoin becomes a $1T macro asset bucket.”

Woo emphasized $55,000 as the milestone price for Bitcoin because it would mean BTC would have hit 10% of gold’s market cap.

Currently, gold’s valuation is estimated to be around $9 trillion. Above $50,000, Bitcoin would begin eating up a relatively large portion of the market cap of gold, which remains the dominant safe-haven asset.

Bitcoin order book and heatmap. Source: Material Indicators

Exchange order books and volume trends also show that traders have moved their sell orders higher, expecting Bitcoin to rise to $30,000 after $20,000 was finally breached yesterday.

If the momentum of the futures, options and spot markets gets sustained throughout the upcoming days, the probability of BTC hitting $30,000 as the first local top remains high.

Options market data show institutions remain bullish

According to Deribit Insights, the research arm of the biggest cryptocurrency options exchange, institutional funds remain bullish on Bitcoin.

In the options market, call options represent buy orders, and put options refer to sell orders. Hence, when buyers of call spreads increase, it shows that the expectations of a larger Bitcoin rally are growing.

Deribit Insights said that the exchange spotted large buyers of call spreads, which is indicative of bullish bias. They said:

“Institutional funds appear to remain bullish. Large buyers of Call spreads (20-24k popular before 20k broke). Today Jan + Feb 22k Calls both bought x250. Jan 30k x500 showing as buy. Near Calls profit, some roll to Jan+Feb, keep exposure. ATM 19.5–20k Puts sold — Bullish bias.”

However, in the foreseeable future, one threat for Bitcoin is whale inflows. Data from CryptoQuant suggests whale deposits into exchanges rose to levels unseen since March 2020.

Considering that Bitcoin has rallied in spite of increasing whale deposits,  BTC can still see a sustainable rally toward $30,000 as institutional buying is only starting to gain steam.