(Kitco News) – Crypto traders had difficulty sleeping last night as thoughts of Bitcoin (BTC) finally hitting $100,000 while they were in dreamland kept them restless – but alas, they will have to wait at least another day.
Data provided by TradingView shows that King Crypto hit a new all-time high of $99,554 in the early hours on Friday before it ran into a sell wall that saw BTC rapidly sell off to $97,228 before bulls fought back.
BTC/USD Chart by TradingView
“Crypto market capitalization surpassed $3.3 trillion, up 3.8% in the last 24 hours,” noted Alex Kuptsikevich, chief market analyst at FxPro. “Ethereum (+7.4%), Solana (+7.5%), XRP (+24%), and Cardano (+9.6%) provided traction.”
“The price of Bitcoin broke through $99K on Friday morning, continuing its steady assault on all-time highs,” he added. “A strong inflow of capital into spot BTC ETFs is fuelling the systematic uptrend, largely due to institutional clients and speculators.”
Data from Farside Investors shows that spot Bitcoin exchange-traded funds (ETFs) saw inflows of more than $1 billion in trading on Thursday, the highest level since November 11.
“However, since the beginning of November, there have also been several news-driven rallies,” Kuptsikevich said, the most recent following the resignation of SEC chief Gary Gensler. “He had been actively trying to curb the spread of cryptocurrencies throughout the financial industry. Now, traders are betting on a U-turn in crypto policy, not just a more dovish regulation.”
Elaborating further on the resignation of Gensler was George Georgiades, general counsel at stablecoin payments network Borderless.xyz, who said an SEC Chair who is more open to working with the crypto industry would be a major plus for the ecosystem as a whole.
“The resignation of Chairman Gensler offers an opportunity to move beyond a tenure characterized by ‘regulation by enforcement’ to fostering meaningful engagement between regulators and market participants toward developing a regulatory framework that fosters innovation, protects consumers, and ensures market integrity,” he said in a note shared with Kitco Crypto. “A change in leadership and new approach to governance by the SEC, as well as other agencies, will be instrumental in positioning the United States as a global leader in the advancement of blockchain technology and digital assets.”
While the crypto community is flying high following Gensler’s resignation announcement and with Bitcoin nearing $100,000, analysts have warned that the price action has been a little too hot recently, meaning there’s a strong chance a correction could occur.
“Bitcoin is rapidly approaching $100K, at which point we should expect a major shakeout at a major milestone, but we still see the end of this momentum around $110K,” Kuptsikevich said.
According to Gracy Chen, CEO of Bitget, “Whether BTC can break through $100,000 and whether there will be a pullback after the breakout” depends on several factors, including institutional dominance, action in the derivatives market, and the psychology of traders.
“The main driver behind BTC's rapid rise is still institutional involvement,” she said. “We have seen large net inflows into BTC ETFs this week. By Wednesday this week, BTC ETFs had achieved a net inflow of $1.8 billion.”
“MicroStrategy purchased 51,000 BTC last week at a cost of $88,617 each, and this week, they announced plans to raise $2.6 billion to continue purchasing BTC,” she added. “Well-known mining companies are planning to issue $850 million in convertible bonds to buy BTC. The massive spot buying power of traditional funds has caused BTC’s price to rise quickly.”
In the derivatives market, Chen noted that “The open interest in BTC contracts has surged to $63 billion, with a daily increase of $6 billion, attracting significant hot money into the market. BTC's implied volatility (IV) has risen to 60, indicating a higher probability of large market fluctuations in the future. Short-term capital has a tendency to lock in profits, which could lead to large price swings around the $100K mark.”
Regarding the psychology of traders, she highlighted that “Reaching $100,000 could act as a psychological barrier where investors might reassess their positions, leading to a natural sell-off point, as seen in other asset classes when significant round numbers are breached.”
“Therefore, we believe that if BTC breaks through $100K, there is a high probability of a pullback,” Chen concluded. “However, the entry of long-term institutional funds suggests that BTC's price is far from this point, and a breakout above $100K and further upward movement is only a matter of time.”
And regarding the sell wall that halted Bitcoin’s ascent to $100k, market analyst Material Indicators highlighted that “#FireCharts shows a massive #Bitcoin sell wall compressed between the $99.3k - $100k range.”
“The good news is there has been a slight bit of erosion in the last few hours. The bad news is, it's still nearly $300M in liquidity,” they added. “It would actually be good to see whales start dumping blocks of ask liquidity to force $BTC into a support test and to ultimately make the wall easier to penetrate. With the ETF faucet turned off for the weekend, we could see some dip buying opportunities ahead.”
At the time of writing, Bitcoin trades at $98,401, an increase of 1.65% on the 24-hour chart.
