Bitcoin Technical Analysis as it Nears the $100,000 Milestone

Bitcoin (BTC)’s price has surged, nearing the psychological milestone of $100,000. The announcement of President-elect Donald Trump’s “Crypto Advisory Council” has created significant optimism among investors. This council is expected to streamline crypto regulations, boost US leadership in the sector, and work towards establishing a Strategic Bitcoin Reserve. Such developments reflect the increasing institutional and governmental interest in Bitcoin, driving demand and price upward.

Moreover, the resignation of SEC Chair Gary Gensler has further fueled Bitcoin’s rally, pushing its price to an all-time high of $99,800. Furthermore, the large-scale Bitcoin acquisitions by MicroStrategy have provided additional support. MicroStrategy’s purchase of an additional $4.6 billion worth of Bitcoin indicates confidence in its long-term value.

The chart below shows Bitcoin’s average transaction fee and daily transaction count for the past 5 years. The transaction fee is currently $3.10, while the daily transaction count is 444,699. Transaction counts have been volatile but remain high, while fees remain low in recent months. High transactions with low fees suggest efficient network activity, which can attract more users. This could positively impact Bitcoin’s price by increasing demand and usability as a payment system.

Bitcoin Nears the $100,000 Milestone

The daily chart below shows the price is approaching the $100,000 psychological level. This level has been the primary target of the strong rally in the Bitcoin market. The price action on the daily chart indicates that a complex descending broadening wedge pattern has formed. The breakout from this pattern at $67,000 initiated a significant upward move. This rally was further supported by the breakout from the key level of $74,000. Moreover, the 50 SMA crossing above the 200 SMA triggered this strong surge in Bitcoin’s price.

When calculating the approximate move after the breakout of the descending broadening wedge pattern at $67,000, the price target falls within $100,000 to $102,000. Moreover, the RSI has reached the strong overbought region, indicating that a price correction might occur. However, the long-term outlook remains bullish. If the price corrects lower from this region, the support zone between $74,000 and $67,000 will be a key level for buyers.

The 4-hour chart also shows that the breakout from the descending broadening wedge was bullish constructive. After breaking out at $67,000, the price retested this level along the black trendline around $67,000 before initiating a strong surge. The rally does not form any distinct pattern, with the price rising steadily. This type of price action suggests that the market is in a parabolic move and shows no signs of a correction. A potential correction could occur if the price fails to break above $100,000 and consolidate around that level.

What is the Next Move in Bitcoin

The weekly chart below highlights the target range of $100,000 to $102,000. The chart indicates that the price has been trading within an ascending channel pattern. Within this channel, the price forms a cup pattern. Additionally, the emergence of a descending broadening wedge at the edge of the cup’s neckline suggested a price compression. This price compression is a bullish sign. The price consolidation within this descending broadening wedge for the past 8 months and the breakout above $74,000 triggered a strong surge in Bitcoin. The black trendline defines the key level of $100,000, stretched from the highest point of the cup pattern.

As the price approaches the key level of $100,000, any price correction from this region would likely present a buying opportunity for traders targeting the $250,000 area. This target is calculated based on the ascending channel formation. Historically, major moves are often unstoppable when Bitcoin breaks key levels, with the price continuing to rally despite overbought conditions. During such parabolic moves, the price tends to ignore significant key levels and continues to rise sharply.

Risk Factors

Bitcoin remains a highly volatile asset, subject to significant price swings. Regulatory uncertainties, including the evolving stance of governments or the SEC, can disrupt market confidence. The unexpected policy changes could lead to sudden Bitcoin price declines. Additionally, overbought conditions indicated by technical indicators increase the likelihood of short-term corrections. Traders must be cautious as the price is near a key psychological level of $100,000. Market liquidity and institutional actions also pose risks. Macroeconomic changes or declines in investor sentiment can exacerbate volatility.

Final Words

Bitcoin’s strong rally toward $100,000 reflects growing institutional interest and favorable political developments. The breakout above key technical levels has generated significant momentum. The short-term target has been achieved, and the price appears poised for a potential correction. Strong support is between $74,000 and $64,000, the breakout zone where this upward move began. However, a decisive break above $100,000 could negate the short-term pullback and pave the way for the next leg higher, with $250,000 as the long-term target. Despite overbought conditions, Bitcoin’s long-term outlook remains bullish, attracting global attention as a strategic asset.