Bitcoin, currently priced at $97,729, fell drastically after reaching an all-time high at $108,300 on December 17 and has remained below the $100,000 mark since December 19.
Crypto analysts at Bitfinex think Bitcoin might see a recovery rally, but its price changes a lot based on more trading activity and the end-of-holiday market slowdowns.
On January 3, Bitcoin’s daily trading volume was at $66.7 million, which is 91% less than the $743 million trading volume on December 5, when it first went over the $100,000 mark.
Experts suggest that the holiday season has contributed to Bitcoin’s subdued price momentum, and they expect the market to improve once the festive period ends.
“For a strong impulse, we lack sufficient trading volume. Therefore, we are waiting for the market to recover from the holiday season,” wrote CryptoQuant analyst Axel Adler in a post on January 4.
Analysts at Bitfinex are holding an optimistic view despite the trading volume being in the doldrums, stating that Bitcoin could trade in a range of $95,000 to $110,000 by the end of January.
They also alluded to a possible increase in crypto prices, citing President-elect Donald Trump’s inauguration on January 20 as a catalyst event. However, they don’t think the inauguration is going to raise prices quickly but rather see it as a sign of better cryptocurrency rules coming to the U.S.
According to analysts, the growth of U.S. spot Bitcoin exchange-traded funds (ETFs), which are nearing $110 billion in assets under management, could contribute to Bitcoin’s long-term price rally.
In short, Bitcoin’s recovery to $105,000 will depend on a boost in trading volume as the market recovers from holiday-driven illiquidity.
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