Bitcoin ($BTC), the world’s most valuable cryptocurrency, hit a new all-time high of $106,352 on Sunday. While its price has since dipped slightly, it remains strong, trading at $104,700, up 2.72% in the last 24 hours.
Analysts are optimistic that Bitcoin’s rise could continue, setting the stage for a bullish start to the new year. The latest surge in Bitcoin’s price is being fuelled by a mix of political announcements, institutional activity, and investor enthusiasm.
One key factor is US President-elect Donald Trump’s recent comments about creating a “strategic crypto reserve”. Trump stated his plans to “do something great” with cryptocurrency, which has increased market confidence.
Analysts view this as a potential shift in government policy toward recognising Bitcoin as a legitimate asset. A crypto analyst at BTC Markets, Rachael Lucas, explained why the new high is significant:
“This milestone marks Bitcoin’s transformation into a more established asset class. Institutional demand, corporate investments, and ETFs have all played a role in strengthening its legitimacy.”
In addition to Trump’s remarks, institutional investors have been making big moves. MicroStrategy, a business intelligence company, announced that it would join the Nasdaq 100 on 23 December.
The company already holds a Bitcoin reserve worth over $44 billion, and its co-founder, Michael Saylor, recently shared several bullish posts about Bitcoin on social media, encouraging more investment.
Another boost came from Riot Platforms, a major Bitcoin mining company, which revealed it had purchased 5,117 Bitcoin at an average price of $99,669 each. These developments show the growing role of large corporations in supporting Bitcoin’s growth.
The role of the Federal Reserve
Another reason for Bitcoin’s rise is the upcoming Federal Reserve meeting in the United States, where a decision on interest rates is expected.
The CME Group’s FedWatch Tool suggests a 97.1% chance that the Fed will cut interest rates by 25 basis points this week.
Lower interest rates often weaken the value of the US dollar, which can make Bitcoin more appealing as an alternative store of value. An analyst at Presto Research, Min Jung, said the meeting could provide important clues about the Fed’s future policies:
“The upcoming FOMC meeting this Wednesday will provide crucial insights into the Federal Reserve’s outlook on potential rate cuts.”
Meanwhile, spot Bitcoin exchange-traded funds (ETFs) have recorded net inflows of $12.2 billion since the US election on 5 November. These funds make it easier for institutional and retail investors to buy Bitcoin, further driving up demand.
Bitcoin’s market value now stands at over $2 trillion. With the cryptocurrency currently trading near $104,700, analysts believe the next target could be $110,000. Crypto analyst, Tony Sycamore, noted:
“The pullback that many expected just didn’t happen. With all this positive news, the market is in blue sky territory.”
What’s next for Bitcoin?
While Bitcoin’s surge has brought excitement, experts have mixed opinions on where the cryptocurrency is headed next.
Investment firm VanEck predicts that Bitcoin could hit $180,000 by 2025. They attribute this potential growth to increased adoption by individuals, businesses, and even governments.
The firm also believes that US banks could soon start offering Bitcoin custody services, making it easier for people to store and use the cryptocurrency.
VanEck has also suggested that the US may create a “Strategic Bitcoin Reserve”, similar to its gold reserves, by 2025. This would mark a major step in integrating Bitcoin into the global financial system.
Despite these optimistic forecasts, some analysts are urging caution. Popular trader, Jason Pizzino, pointed out that search interest for Bitcoin remains relatively low, which could signal limited retail involvement.
“For this rally to sustain, we’ll need stronger volume and consistent closes above recent swing highs”, he said.
Bitcoin’s technical indicators also show mixed signals. The Relative Strength Index (RSI) currently stands at 68, just below the overbought threshold of 70.
Meanwhile, the Moving Average Convergence Divergence (MACD) shows negative momentum but hints at a possible reversal. If the MACD line crosses above the signal line, it could signal a bullish trend.
Analysts are also watching Bitcoin’s support zone between $102,650 and $104,259. If prices hold steady, Bitcoin could target $131,252, based on a Fibonacci retracement level from its November rally.
