Bitcoin News (January 4, 2025) – Bitcoin Breaks $97K: Will Low Trading Volume Derail the Rally?
Bitcoin News (January 4, 2025) – Bitcoin (BTC) is inching closer to the much-anticipated $100,000 mark, recently reaching an intraday high of $98,471. This price surge has sparked renewed interest and optimism among bulls, but there are emerging signs that caution is necessary. Despite the bullish price action, key indicators suggest that Bitcoin’s momentum may be weakening, leaving many to question if the cryptocurrency can maintain its upward trajectory.
Low Trading Volume Raises Red Flags for Bitcoin Bulls
Although Bitcoin’s price has surged past $97,000, some analysts have expressed concerns over the cryptocurrency’s weakening momentum due to low trading volume. Glassnode co-founders Jan Happel and Yann Alleman recently highlighted that despite Bitcoin breaking the $97K level, the market’s trading volume remains low—a critical factor for sustaining a bullish continuation in the short term.
In their analysis, the Glassnode team stressed that higher trading volume is essential for any sustained price rally, as it signals strong market participation and investor conviction. Without this crucial volume support, Bitcoin may struggle to maintain its momentum as it inches toward the $100,000 milestone.
Bearish Reversal: Is Bitcoin’s Uptrend Reaching Its Peak?
In addition to the low volume concerns, a technical indicator has raised alarm bells for some traders. According to 10x Research, Bitcoin’s uptrend could be nearing its peak after the formation of a “shooting star” candlestick on the monthly chart. This bearish reversal pattern often signals the end of an uptrend, with potential for significant price corrections.
The shooting star candle was formed after Bitcoin started the previous month with a bullish rally, only for bears to take control by the end of the period, pushing the price back down. Historically, Bitcoin has experienced notable price corrections after similar patterns emerged in 2018 and 2021. While some analysts are hopeful that the bull market is not over yet, others believe that Bitcoin might face a significant trend reversal in the near future.
Federal Reserve’s Hawkish Stance Adds Pressure to Bitcoin’s Bullish Outlook
Further complicating the outlook for Bitcoin is the Federal Reserve’s recent stance on interest rates. The Fed has signaled that it will implement fewer rate cuts than initially expected in 2024, a move that many experts see as a hawkish shift. For Bitcoin bulls hoping to see a significant rally following the cryptocurrency’s breach of the $100,000 threshold, this shift in policy is concerning.
The prospect of higher interest rates could reduce investor appetite for riskier assets like Bitcoin, as returns on traditional investments such as bonds become more attractive. As a result, the Fed’s hawkish tone could dampen enthusiasm for the crypto market, potentially leading to downward pressure on Bitcoin’s price.
BlackRock’s Bitcoin ETF Outflows Raise Concerns About Institutional Sentiment
Another worrying sign for Bitcoin comes from BlackRock’s iShares Bitcoin Trust (IBIT). Recently, the product saw record-breaking outflows of nearly $333 million. While a single outflow event does not necessarily indicate a broader trend, it does raise questions about institutional sentiment towards Bitcoin and the future of Bitcoin-based exchange-traded funds (ETFs).
This withdrawal is particularly significant given that BlackRock’s Bitcoin ETF was seen as a major factor driving the 2024 bull run. The outflows could be interpreted as a lack of confidence among institutional investors, which might signal the start of a larger trend of reduced institutional interest in Bitcoin.
Bitcoin Price Outlook: Will the Bulls Reclaim Control?
Despite the challenges, there remains a strong base of bullish sentiment surrounding Bitcoin. Traders are eagerly watching for any signs of reversal or renewed upward momentum, with many expecting the cryptocurrency to breach the $100,000 mark in the coming months. However, with low trading volume, bearish technical signals, and a potential shift in institutional sentiment, Bitcoin faces significant headwinds.
The key to determining whether Bitcoin can sustain its bullish trend will lie in whether the market can see a pickup in volume and whether institutional investors remain confident in the digital asset. Additionally, any further policy shifts from the Federal Reserve could play a pivotal role in shaping Bitcoin’s price action in the near future.
Conclusion: Caution Amid the Rally
As Bitcoin pushes towards its $100,000 target, both bulls and bears are preparing for what could be a volatile next few weeks. While the price surge is impressive, the low trading volume, bearish candlestick pattern, and external factors like the Fed’s interest rate policy create a challenging environment for sustained upward movement.
In the coming weeks, Bitcoin investors will need to closely monitor trading volume, institutional sentiment, and broader macroeconomic factors to gauge whether the current bullish momentum is sustainable or if a major trend reversal is on the horizon.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
Leave a comment