- Bitcoin rocketed toward $100,000 last week but pulled back just shy of the milestone in recent days.
- The six-digit mark is a stiff resistance level and psychological selling point for investors, a source told Business Insider.
- Even if the correction deepens, analysts still expect bitcoin to top $100,000 this year.
The crypto market held its breath last week as bitcoin verged on breaking through the $100,000 mark, only to be disappointed as the momentum stalled and then sharply reversed course.
The token’s price reached a record of $99,655.5 on Friday, but fell back just before crossing the six-digit milestone. As of 2:53 p.m. ET on Tuesday, the cryptocurrency traded at $91,749, nearly an 8% drop from its all-time peak.
Matt Mena, a crypto research strategist at 21Shares, explained that the $100,000 level serves as a psychological selling point for investors who have held onto bitcoin since its last bull run.
He told Business Insider that token holders likely anticipated declines around the price point and chose to sell some holdings to lock in gains. The same behavior can be traced back previous highs in bitcoin’s price, he said.
“A similar pattern emerged earlier this year in March when bitcoin lingered near its previous all-time high of $69K from 2021 for almost seven days before eventually breaking through,” Mena told BI in an email. “As the price approached this level, many participants from the last cycle began taking profits, anticipating a potential sell-off.”
Other analysts said there are other factors that can also be blamed for bitcoin’s deepening correction.
FxPro chief market analyst Alex Kuptsikevich pointed to easing geopolitical tensions between Lebanon and Israel, reducing investors’ appetite for safe-haven assets like bitcoin.
In a note on Tuesday morning, Standard Chartered added that this week’s falling US Treasury term premium could also be a culprit.
Bitcoin tends to edge up as yields fall. While yields moved higher in the wake of Donald Trump’s latest tariff announcements on Monday, the 10-year yield has come down from three-month highs it reached earlier in the month following the election.
When could bitcoin see $100,000?
If bitcoin’s price continues breaking lower, it could fall as far as $80,000, Mena told BI.
He said that crypto-focused options traders confirm this thinking, with options contracts expiring in December betting heavily on bitcoin sinking to $80,000.
“The $80K support level is likely the extent of this correction, which could ultimately be healthy for the market,” he said. “Bitcoin often retests previous support levels to consolidate strength and shake out leveraged positions and weak hands.”
To be sure, before bitcoin reaches this level, it would first retest several support levels above that. The next key threshold below $90,000 to watch is $87,000, Mena noted.
After a drop to this level, Standard Chartered expects bitcoin could resume its rise.
Mena also still expects bitcoin to rally into the year-end, with the holiday season helping the token rally to a range of $110,000-$120,000.
“During these holiday gatherings, investors often share their excitement about bitcoin and crypto with family and friends, discussing their gains and sharing their [Profit and Loss],” Mena told BI: “This can spark curiosity and interest, bringing new investors into the space and onboarding new users. This is something we have seen play out in previous years.”
He also expects crypto investors to front-run the presidential inauguration in January, which is what happened before November’s election day as investors bid up crypto prices in their excitement for Trump’s eventual victory.
“This preemptive activity could generate the momentum needed to push Bitcoin beyond the $100K mark.”
Investors have been hugely excited about Trump’s second term. The president-elect has voiced support for crypto, teased the creation of a national bitcoin reserve, and is reportedly screening candidates for a crypto-focused White House role.
