Bitcoin Price Hits $100K But Why Are Traders Cautious?

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On Monday, the value of a single Bitcoin (BTC) reached an impressive $100K, rekindling enthusiasm within the cryptocurrency sector after 11 consecutive days of relatively stable pricing. Yet, this positive sentiment does not appear to be widely shared among traders, who are displaying signs of caution instead.

Bitcoin Price Analysis

Bitcoin’s price surged by 3.91% on Monday, rising from $98,340 to $102,185. This surge also boosted altcoins and the overall crypto markets. Even though Bitcoin breached the $100K psychological barrier, some traders and investors remain wary, predicting a possible reversal or market adjustment might occur.

Looking at the Bitcoin graph provided, you can see that the recent surge has led BTC to encounter resistance at approximately $102,306 – a level often seen as a potential turning point due to its alignment with the 161.8% Fibonacci retracement. This well-known reversal zone supports the theories already being discussed by traders.

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

According to Adam from TradingRiot, the surge in Bitcoin’s price up to $100K was closely linked with a significant increase in open interest.

Adam adds,

When the rate at which the Open Interest (OI) increases dramatically within a brief span, traders (either buyers or sellers) frequently find themselves losing their footing prior to any further escalation.

Will Bitcoin Rise As US Dollar Tops? This Trader Remains Cautious

BluntzCapital, a well-known figure in the crypto world with over 306K followers, recently stated that the U.S. dollar index (DXY) appears to have peaked following a three-month surge. This analysis predicts that DXY could fall below 99. As previously mentioned in an article from CoinGape, when the Dollar Index decreases, riskier assets such as Bitcoin tend to increase. BluntzCapital suggests that this potential decline in DXY might benefit risky assets, but since Bitcoin and U.S. equities have been strong even during DXY’s three-month rise, the analyst remains cautious.

It appears that DXY has peaked, reaching 108 as anticipated, which aligns with a significant 0.618 level. Subsequently, it seems to be entering a prolonged ABC correction phase following an intense downtrend.

risk assets held up extremely well while dxy pumped which was counter intuitive.

i think we start heading back below 99 in 2025.…

— Bluntz (@Bluntz_Capital) January 5, 2025

Bitcoin’s Fractal Suggests Price May Dip Before Bull Rally

In his recent post, ImmortalCrypto is taking a careful approach due to the Bitcoin price surge resembling a pattern that started at the beginning of the year. He explains that in 2025, a significant price increase occurred, only to be followed by a dip down to December lows. It wasn’t until after this movement took place that Bitcoin began a strong upward trend.

According to ImmortalCrypto’s analysis, and aligning with CoinGape’s Bitcoin price forecast, it seems that Bitcoin may not reach its December 2024 lows until then, as this trend tends to recur each month since May 2024, suggesting a pattern where a rally begins after the previous month’s lows are touched.

Crypto Markets To Suffer Liquidation If BTC Reverses Uptrend

If Bitcoin experiences a decline as some traders predict, it might lead to a wave of liquidations. Coins like AI16Z (AI16Z), Worldcoin (WLD), Render (RENDR) and other altcoins that have seen gains due to Bitcoin’s recent surge could potentially erase their recent price increases.

If Bitcoin’s price correction is significant and unstable, there could be a large-scale liquidation of positions. As per CoinGlass data, $130 million worth of short positions were erased due to Bitcoin’s rally on Monday. Conversely, if Bitcoin experiences a crash and reverses its nearly 4% gain, the opposite effect might happen.

In summary, even though Bitcoin’s rise to $100K has stirred enthusiasm, traders are still treading with caution. This is due to several factors that make these investors wary, such as the recent increase in open interest, the possible adjustment in the US dollar index, and the “beginning of the year” pattern.

In light of the market’s intricate challenges, it’s crucial to stay vigilant about Bitcoin’s price fluctuations and their possible effects on the overall cryptocurrency sector.

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2025-01-07 09:50