🌎 Bitcoin Price May Rebound | Global Crypto News

Bitcoin Price May Rebound in January Amid Ongoing Imbalance Between Demand and Supply

The Bitcoin price has experienced a significant drop this week, largely due to ongoing concerns about the bond market and a relatively hawkish Federal Reserve. The price of Bitcoin fell below $95,000, triggering a steeper sell-off among altcoins. However, there are indications that the coin may bounce back and potentially reach $122,000 in January.

Declining Exchange Balances and Increasing Demand

One key reason why the Bitcoin price may rebound in January is the ongoing imbalance between demand and supply. Demand has continued to rise this year, as evidenced by growing ETF inflows. Spot Bitcoin ETFs have added a net $1.3 billion in assets this year, while companies like MicroStrategy have continued to accumulate Bitcoin. Additionally, Bitcoin whales have also continued to accumulate, adding 34,000 coins since December.

Supply Shrinks as Bitcoin Balances on Exchanges Decline

Supply is also shrinking, as seen in Bitcoin balances on exchanges. The number of Bitcoin coins held on exchanges has dropped to its lowest level in years, standing at 2.1 million, down from 2.72 million in January 2024. This imbalance between demand and supply could soon benefit Bitcoin.

Upcoming FTX Distributions and Donald Trump Inauguration

Another major Bitcoin price catalyst is the upcoming distribution of $16 billion from the FTX Estate to investors and creditors. Most of these funds are currently held in stablecoins like Tether (USDT) and USD Coin (USDC). While some of the recipients will convert them into cash, some of the money will be changed into cryptocurrencies like Bitcoin.

Additionally, Donald Trump’s inauguration on January 20 is expected to usher in a new era of crypto regulations. Although much of this has already been priced in, there is a likelihood that Bitcoin and other altcoins will rise ahead of the event.

Bitcoin Price Has Strong Technicals

Bitcoin’s technical indicators also suggest the potential for further upside in January. On the weekly chart, Bitcoin has formed a bullish pennant pattern. This pattern consists of a long vertical line followed by a triangle-shaped consolidation. The recent sideways movement is part of this pennant formation.

Bitcoin’s uptrend is being supported by the 50-week and 100-week Exponential Moving Averages, a sign that the bullish trend is intact. The Market Value and Relative Value indicator is moved to 2.4, meaning that it is still cheap.

Most importantly, Bitcoin has yet to reach the target of its cup-and-handle pattern. The cup formation has a depth of 75%. Measuring the same distance from the upper side of the cup points to a target of $123,000.

Tips for Bitcoin Investors:

Monitor the ongoing imbalance between demand and supply, as it may benefit Bitcoin.
Keep an eye on the upcoming FTX distributions and Donald Trump’s inauguration, as they may impact Bitcoin prices.
Pay attention to Bitcoin’s technical indicators, such as the bullish pennant pattern and the Market Value and Relative Value indicator.