Author: Frances Yue, Market Watch; Translated by: Tong Deng, Jinse Finance
An analyst said that Bitcoin could rise to a new all-time high of over $125,000 in the first quarter, or it could fall to $77,000 - it all depends on whether President-elect Donald Trump will fulfill his promises to the cryptocurrency industry soon after taking office.
John Glover, Chief Investment Officer of the crypto lending platform Ledn and former Managing Director at Barclays Investment Bank, said that based on the technical analysis tool Elliott Wave Theory, Bitcoin is expected to drop to $89,000 and then break through $125,000 in the first quarter of 2025.
The Elliott Wave Theory believes that asset prices in each cycle are composed of five waves in the direction of the main trend and three corrective waves against the trend. Each corrective wave follows a wave in the direction of the main trend.
Glover said in a telephone interview: "Earlier this week, we saw Bitcoin break below $92,000, so we may have completed the corrective wave before moving towards $125,000."
Glover said that if Bitcoin breaks through $125,000, it may experience another pullback before approaching the cycle high near $160,000.
Glover said that Bitcoin may see a pullback before January 20th's presidential inauguration as investors take profits.
Cryptocurrency bulls expect the regulatory environment to become more favorable during Trump's presidency. They are watching closely whether the new president will quickly fulfill his promises to the cryptocurrency industry, especially his pledge to establish a strategic Bitcoin reserve in the U.S., although Trump has not yet detailed any specific plans.
Glover said that if Trump does not take any action to fulfill his promises in the early days of his administration - especially in the first 100 days after taking office - Bitcoin may see a pullback. Politicians and analysts often use the first 100 days of a new U.S. president's term as a benchmark to measure the potential achievements and impact of the new administration.
However, Glover pointed out that based on the technical setup, Bitcoin is unlikely to fall below $77,000.
Analysts at the blockchain data platform Glassnode said investors should also closely watch the $87,000 level, which is the short-term cost basis for Bitcoin under the assumption of reasonable cryptocurrency valuation. This "on-chain" analysis examines data directly recorded on the blockchain network to gain deeper insights into market trends or investor behavior.
Analysts pointed out that there is a demand gap for Bitcoin between $87,000 and $71,000, making the former a "make-or-break" level for Bitcoin's short-term price. Glassnode analysts said this level acts as support in an uptrend; however, if decisively breached, Bitcoin's price may turn into a resistance level, indicating a shift in market sentiment.
QCP Capital analysts said that another key catalyst for Bitcoin in January could be financial institutions' portfolio rebalancing. Hedge funds and asset managers often choose to rebalance their portfolios in January to formulate their full-year strategies, adapt to market conditions, and optimize tax impacts.
QCP analysts noted that Bitcoin's allocation may increase this year, as more institutions have adopted Bitcoin since the launch of spot Bitcoin ETFs last year, and strategists expect the cryptocurrency regulatory environment to improve.
