Bitcoin (BTC) price hit $100K on Monday, bringing the excitement back to the crypto market after 11 days of sideways movement. However, the optimism is not echoed by traders, who are showing signs of cautiousness.
Bitcoin Price Analysis
Bitcoin price shot up 3.91% on Monday, moving from $98,340 to $102,185. This uptrend caused altcoins and the broader crypto markets to shoot up as well. Despite the bullish development of crossing the $100K psychological level, some traders and investors remain cautious and expect a reversal or market correction.
As shown in the Bitcoin chart below, the recent uptick has pushed BTC to face rejection at the 161.8% Fibonacci retracement level of $102,306. This common area of reversal adds credence to what traders are already insinuating.
Let’s explore some expert insights and what they are expecting from BTC price and crypto markets.
Bitcoin’s Sudden OI Uptick Threatens Recent Price Rally
TradingRiot’s Adam notes that the recent rally in Bitcoin to $100K was accompanied by massive open interest spike.
Adam adds,
“From a relative change point of view, when OI surges very quickly in a short period of time, buyers (or sellers) often get shaken off before any continuation is higher”
Will Bitcoin Rise As US Dollar Tops? This Trader Remains Cautious
BluntzCapital, a popular crypto KOL with 306K followers, posted that the US dollar index (DXY) “looks topped” after a three-month rally. The analyst now expects DXY to correct below 99. As mentioned in yesterday’s CoinGape article, risk-on assets like Bitcoin rallies if DXY drops. BluntzCapital says this drop should be good for risk assets, but since Bitcoin and US equities rallied or held up well during DXY’s three-month rally, the analyst remains cautious.
$DXY looks topped now, hit 108 as i expected, wicked a major 0.618 level and looks like a long slow abc up after an impulsive move to the downside.
risk assets held up extremely well while dxy pumped which was counter intuitive.
i think we start heading back below 99 in 2025.… https://t.co/shQ7zYX3wl pic.twitter.com/D0wldkFTjG
— Bluntz (@Bluntz_Capital) January 5, 2025
Bitcoin’s Fractal Suggests Price May Dip Before Bull Rally
ImmortalCrypto also remains cautious with the recent Bitcoin price rally owing to the “start of the year” fractal. In his X post, the analyst details that the start of 2025 saw the price pump a lot, followed by a sweep of December lows. Only after this move occurred did BTC kickstart a massive uptrend.
Based on this fractal, Bitcoin is yet to sweep the December 2024 lows, especially if history repeats. This outlook presented by ImmortalCrypto falls in line with CoinGape’s Bitcoin price prediction that notes a BTC rally kickstarts after sweeping the previous month’s lows. This pattern has been repeating almost every month since May 2024.
Read More: How High Can Bitcoin Price Go In January 2025?
Crypto Markets To Suffer Liquidation If BTC Reverses Uptrend
If Bitcoin corrects as many traders expect, it could trigger a liquidation event. Ai16z (AI16Z), Worldcoin (WLD), Render (RENDR) and other altcoins that shot up due to BTC’s recent uptick could undo their recent gain.
Depending on the strength and volatility of Bitcoin’s price correction, there could be a massive liquidation event. According to CoinGlass data, $130 million worth of short positions got wiped due BTC’s Monday rally. The opposite could occur if Bitcoin crashes and undoes the near-4% gain.
In conclusion, while Bitcoin’s price surge to $100K has sparked excitement, but traders remain cautious. some of the reasons why these investors remain hesitant include the recent open interest spike, the potential correction in the US dollar index, and the “start of the year” fractal.
As the market navigates these complexities, it’s essential to keep a close eye on Bitcoin’s price movement and its potential impact on the broader crypto market.
