Bitcoin has experienced high volatility since reaching a record level of around $108,300 on December 17, 2024, until today. The price of Bitcoin dropped to around $89,000 on Monday, January 13, 2025, but was unable to continue its decline and has since rebounded to approximately $100,000.
It is worth noting that the strong correlation between Bitcoin and the Nasdaq 100 technology index has returned to a positive 0.70, the highest level since December 2022 when it stood at 0.72. As for the factor putting pressure on cryptocurrencies and U.S. stocks, which are considered high-risk assets, it is the strength of the U.S. dollar and the rising yields of U.S. Treasury bonds across various maturities.
However, despite this, positive sentiment and factors continue to surround cryptocurrencies, such as:
- The anticipation of Donald Trump’s presidential inauguration on January 20, 2025, especially with his pledge to make America the capital of cryptocurrencies and his plan to establish a U.S. Bitcoin Strategic Reserve.
- Increased risk appetite among investors, especially large institutions, as they add Bitcoin to their investment portfolios for diversification purposes and due to strong optimism towards the industry.
- Inflows into Bitcoin-related Exchange-Traded Funds (ETFs), with the possibility of further ETF launches, but this time related to Solana, Ripple, and others.
- A decrease in the U.S. core Consumer Price Index (excluding food and energy), which recorded 3.2%, lower than expectations and the previous reading (3.3%).
The assets of Bitcoin ETFs reached around $122 billion from the launch of Bitcoin ETFs in January 2024 until December 2024. Currently, these assets stand at $106 billion.
From a technical perspective, indicators support the continuation of Bitcoin’s price increase for the following reasons:
- A convergence between the 20-day moving average, which stands at $95,803, and the 50-day moving average, which stands at $97,570. A bullish crossover between them could signal an upward trend for Bitcoin.
- The Relative Strength Index (RSI) currently stands at 57, indicating bullish momentum for Bitcoin.
- A bullish crossover between the MACD indicator (in blue) and the Signal Line (in orange), suggesting bullish momentum for Bitcoin.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
