Key Points
- Bitcoin’s price shows short-term weakness, potentially dropping to $91K.
- Institutional investors continue to accumulate Bitcoin, indicating high demand.
Bitcoin’s Price and Market Movements
Bitcoin’s price has fallen by 2.5% over the past 24 hours, trading around $102,323 as of Thursday, January 22. This drop suggests short-term market weakness, potentially due to the cooling of the leveraged market post Donald Trump’s inauguration.
In the daily time frame, Bitcoin’s price against the US dollar is forming a potential double top, along with a falling divergence of the Relative Strength Index (RSI). Meanwhile, the four-hour time frame shows a possible head and shoulders (H&S) pattern, accompanied by a bearish RSI divergence.
If Bitcoin’s price breaks the support range between $101K and $99.5K, it may trigger a short-term selloff to $91K. However, it’s also possible that Bitcoin’s price could rebound from this support range and rally towards a new all-time high in the near term.
Institutional Investment in Bitcoin
Despite short-term price fluctuations, the overall supply of Bitcoin on centralized exchanges continues to decrease. Over the past week, the overall supply of Bitcoin on CEXes has dropped by nearly 21K, standing at about 2.18 million.
Institutional investors, led by MicroStrategy Inc, which recently purchased 11K Bitcoins and now holds over 460K coins, continue to accumulate Bitcoin as a hedge against global inflation. The World Liberty Financial (WLFI) project, associated with the Donald Trump family, is also purchasing more Bitcoins, among other digital assets.
US spot BTC ETFs, spearheaded by BlackRock’s IBIT, recorded a net cash inflow of about $248 million on Wednesday, holding a total net assets of over $122 billion.
Future Market Outlook
Following the inauguration of pro-crypto US President Donald Trump, traders are closely watching market data that could influence the Federal Reserve’s rate policy decision next week. On Friday, the Bank of Japan (BoJ) is set to release its first policy rate change of 2025, with economists predicting a 25 bps hike to 0.5%.
Later in the day, several EU countries, the United Kingdom, and the United States will release their respective Flash Manufacturing PMI. Furthermore, discussions about more nation-states implementing a strategic Bitcoin reserve, led by the United States, could significantly impact Bitcoin’s price action in the long term.
