Bitcoin suffered a setback after the holiday, losing nearly 4% in value over the last day. This latest drop briefly dragged its price below $95.2K on Thursday. In fact, after multiple corrections since mid-December, Bitcoin has almost wiped out its monthly gain.
However, the data suggests there could be room for more upside.
Binance reserves decrease
CryptoQuant’s latest analysis reveals that Binance’s Bitcoin reserves have fallen to their lowest levels since the beginning of 2024. This decline started notably in August and mirrors a similar trend seen in January, when reserves also reaching a low, a time that preceded a 90% increase in the price of BTC.
This milestone coincides with Bitcoin hitting an all-time high of around $108,000. Binance’s declining reserves indicate that investors are growing increasingly confident in Bitcoin’s long-term potential, opting to withdraw their holdings instead of keeping them on the exchange for short-term selling.
Historically, these pullback periods have often been associated with the build-up of positive market momentum.
Meanwhile, CryptoQuant data also revealed an increase in demand for Bitcoin, as over-the-counter (OTC) tables recorded their biggest drop in monthly inventories in 2024, with a reduction of 26,000 BTC. Since November 20, the total balance on these tables has decreased by 40,000 BTC, demonstrating a tightening of supply.
This decrease in available inventory suggests that demand is increasing, thus contributing to a boost in the construction market. Bitcoin’s continued retreat from OTC counters indicates growing confidence in the asset, which in turn could set the stage for the next stage as supply tightens.
Bitcoin: $120,000, a realistic goal for January
While Bitcoin may have been trading below $100,000 for almost a week, experts suggest it is poised for a major move. A crypto analyst under the pseudonym “xoom” said the crypto asset’s trajectory shows a bullish setup despite the lack of a Christmas rally. According to his analysis, the market is showing a bullish candle with increasing volume, emerging from the lows of a megaphone pattern.
This type of pattern often indicates an impending breakout. If the pattern holds, the analyst predicts a potential price range of $110,000 to $130,000 by the end of January, with $120,000 as a realistic target. While volatility and a brief dip to remove weaker hands is possible, any pullback is expected to be short-lived, with the overall trend up.
The analyst also sees the possibility of Bitcoin reaching $135,000 to $140,000 or more in the coming months. With these events on the horizon, the analyst believes now is not the time to stay on the sidelines, as the next move could trigger the start of a major rally.
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