Can Bitcoin Surge Past 100k Mark?

The Bitcoin price surge following the US presidential election has hit stiff resistance in its march towards the $100,000 mark, but can the cryptocurrency break through or is a correction in order?​

Bitcoin Faces Challenges

The world's leading cryptocurrency has rocketed over 40% since the US presidential election results, but its upward momentum has met stiff resistance as it tries to clear the technical $100,000 mark. Analysts attribute the lack of a breakthrough to several factors, including profit-taking from the recent rally, significant leverage in the system, and shifts in the overall outlook for monetary policy. While they suggest a short-term correction may be in order, the trends indicate that Bitcoin could resume its rally and eventually break resistance.

It's important to note that Bitcoin and other cryptocurrencies are not immune to the US dollar performance. The initial reaction to the election over concerns about tariffs and potential major policy shifts has moderated following the announcement of a market-friendly hedge fund manager at the top of the Treasury Department. As inflation shows signs of easing and investors question the inflationary effects of tariffs, the likelihood of a Fed rate cut next month has increased to 70%. With markets returning to a more business-as-usual state, the rush towards cryptocurrencies might also be subsiding somewhat.​

Correction or Breakthrough

The week began with the third-largest daily outflows from Bitcoin ETFs, reversing inflows garnered since the election. Bitcoin retraced around 7% from its peak before stabilising at around $95,000 as liquidity dried up due to the US holidays. Market critics suggest relatively new buyers who joined above $56,000 were responsible for much of the selling, indicating a typical profit-taking correction. Despite warnings of a potential 30% correction before breaking into six-figure territory, long-term Bitcoin holders maintain their positions and even add during the pullback.

Most analysts believe an array of tailwinds could push Bitcoin higher in the medium to long term, including the recent halving that constrained supply, continued buying by companies like MicroStrategy, and an improved regulatory environment under Donald Trump. Bitcoin reveals some seasonality, typically rising more in the final quarter of the year, with November and December historically outperforming other months. While headlines may focus on the effects of the election, Bitcoin's recent movement is not significantly out of line with patterns observed in previous bull runs.​

Long-Term Pattern Points to 127k

Bitcoin's long-term price action resembles a cup-and-handle (C&H) pattern, with its depth from the peak of $69,120 to the trough of $15,370 suggesting a target of $127,450 when measured from the breakout point of $73,700. In the interim, $110,000, $120,000, and mid-points in between may offer opportunities to secure some profits. Meanwhile, there appears to be a lack of technical support, with only round figures like $90,000 and $80,000 acting as major rebound levels on the downside, with the breach of the former seen as a critical bearish catalyst.​

Source: SpreadEx / BTCUSD

Key Takeaways

The post-election Bitcoin surge met resistance around $100,000, with analysts attributing it to profit-taking, leverage, and shifts in the overall monetary policy outlook. While a short-term correction may be due, the long-term trends suggest Bitcoin could eventually break through the psychological mark, supported by tailwinds such as constrained supply, institutional buying, and improved regulations. Its recent price action is not significantly misaligned with its typical seasonality patterns observed in previous bull runs.​