Bitcoin recovers above 95k, can BTC retake 100k?

Bitcoin forecast – technical analysis 

Bitcoin rose to an all-time high of 108k a week ago, boosted by optimism surrounding a more crypto-friendly environment under Trump and on hopes of a Bitcoin strategic reserve. However, the price failed to hold this level, tumbling sharply to a low of 92k on Thursday after a more hawkish Federal Reserve. Can Bitcoin retake the key 100k milestone and eye fresh all-time highs? 

Powell the Christmas Grinch 

Last week, the Fed cut rates by 25 basis points as expected but projected just two 25 basis point rate cuts next year, fewer than the three cuts previously guided for. The central bank's hawkish outlook hit Bitcoin and other risk assets, including US equities, hard. Bitcoin fell 14%, slumping below 100k to 92k. While cooler-than-expected core PCE figures on Friday helped to pick Bitcoin off its low, the price trades at 96k at the time of writing, still below the 100k milestone. 

Yet despite this shift to the fundamental backdrop, several metrics suggest that the recent fall could have been a healthy pullback rather than something more sinister. 

Institutional demand vs miners production 

Institutional demand is showing signs of holding up even amid BTC price volatility. Over the past week BTC ETFs recorded inflows of $423.6 million or 4349 BTC. However, miners produced just 2250 BTC in the same period, almost half the amount of Bitcoin acquired by ETFs. 

This trend points to tightening liquidity in the Bitcoin market. While miners face post-halving challenges, Bitcoin ETFs absorb supply as institutional investors show commitment to Bitcoin as a long-term investment. So far, in December alone, BTC ETFs have recorded $5.5 billion in inflows, underscoring institutional confidence in Bitcoin after the US election. 

Should institutional demand remain strong and supply significantly weaker, this could drive prices higher.  

Data from CryptoQuant adds to the picture of restrained supply. The Bitcoin market has seen a massive drop in sell-side liquidity, which could indicate a supply shock is coming. On-chain analysis shows that the amount of Bitcoin readily available for sale has dropped to its lowest level since 2020. 

Only 3.397 million Bitcoins are available for sale across exchanges, miners, OTC desks, and GBTC, a drop of 678,000 BTC just this year. Shrinking supply creates a tighter market, particularly as demand remains robust. 

Bitcoin forecast – technical analysis 

BTC/USD broke out below its rising channel dating back to early November before finding support on the 50 SMA on two occasions. The price has rebounded from the 50 SMA, retaking the 95k round number. 

Buyers will look to extend the recovery to 100k, the psychological level and the lower band of the rising channel. A rise above this level opens the door to 108k and fresh all-time highs. 

Sellers will need to take out the 50 SMA in order to test 92k, the December low. A break below here creates a lower low and brings 90k into focus ahead of 85k. 

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