The Bitcoin price has dropped below the $100,000 psychological level and is now holding between the $96,000 and $98,000 range. Crypto analyst Ali Martinez provided insights into why Bitcoin could be holding well within this range. 

Why The Bitcoin Price Is Holding Steady Between $96,000 And $98,000

In an X post, Ali Martinez noted that one of the most important support levels for the Bitcoin price is between $98,830 and $95,830, where 1.09 wallets bought over 1.16 million BTC. This explains why Bitcoin is holding steady between $96,000 and $98,000 as investors who bought between this level continue to provide huge support for the flagship crypto. 

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As Martinez suggested, it is important for these holders to continue to hold steady as a wave of sell-offs could send the Bitcoin price tumbling even below $90,000. The flagship crypto dropped below $100,000 following the Federal Reserve Jerome Powell’s recent speech, in which he hinted at a hawkish stance from the US Central Bank. 

This sparked a massive wave of sell-offs, as a Hawkish Fed paints a bearish picture for risk assets like Bitcoin. However, despite the Bitcoin price drop below, most Bitcoin holders remain in profit, which is a positive for the flagship crypto. IntoTheBlock data shows that 86% of Bitcoin holders are in the money, 4% are out of the money, and 9% are at the money.

These Bitcoin holders still seem bullish on the leading crypto as they continue to accumulate more BTC. In an X post, Ali Martinez stated that so far in December, 74,052 BTC have been withdrawn from exchanges, and this trend doesn’t seem to be slowing down. 

Traders Anticipate A Bullish Reversal 

Ali Martinez suggested that crypto traders anticipate a bullish reversal for the Bitcoin price from its current level. This came as he revealed that traders on Binance nailed the top, with 62.17% shorting Bitcoin while it was trading at $108,000. Now, Martinez stated that sentiment has flipped, with 55.44% of these trading now longing dips below $96,000. 

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Meanwhile, it is crucial for the Bitcoin price to hold this $96,000, as Martinez warned that if BTC loses this support, it could drop below $90,000. The analyst stated that based on the Fibonacci level, if Bitcoin loses $96,000, the next point of focus becomes $90,000 and $85,000. Meanwhile, from a bullish perspective, crypto analyst Justin Bennett suggested that the $110,000 target is still in focus for the Bitcoin price.  

At the time of writing, the Bitcoin price is trading at around $97,000, down over 3% in the last 24 hours, according to data from CoinMarketCap. 

Featured image created with Dall.E, chart from Tradingview.com

In an exclusive interview with Yahoo Finance, Matt Hougan, Chief Investment Officer at Bitwise Asset Management, shared his bullish outlook on Bitcoin, projecting significant price appreciation by the end of 2025. “We expect Bitcoin to be up above $200,000 by this time next year,” Hougan stated, attributing this forecast to three primary sources of demand: exchange-traded funds (ETFs), corporate investments, and governmental acquisitions.

Hougan elaborated, “There are ETFs that are vacuuming up Bitcoin, public companies like MicroStrategy are accumulating Bitcoin, and now we’re seeing discussions about governments investing in Bitcoin. It ultimately boils down to supply and demand—there’s too much demand and not enough supply, which drives the price higher.”

When probed about the sustainability of such demand, Hougan emphasized the gradual awakening of different investor segments to Bitcoin’s value proposition. “People just wake up to Bitcoin at different paces. We’ve seen retail investors engage first, followed by companies and financial advisors, and now institutions are recognizing that Bitcoin belongs in a diversified portfolio,” he explained.

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“Bitcoin is now a global macro asset worth a few trillion dollars, and virtually every investor should have some exposure. We still have a large number of investors to go, which is why I believe we’re still early in this journey. We have many quarters to go,” he added.

How High Can Price Go If The US Buys Bitcoin?

A pivotal aspect of Hougan’s forecast hinges on the potential establishment of a US Strategic Bitcoin Reserve (SBR). Addressing this, Hougan remarked, “If we do get a Bitcoin strategic reserve where the government is buying Bitcoin, as proposed in Senator Lummis’ bill for the government to purchase a million Bitcoin, $200,000 Bitcoin is going to be looking quaint. You’re going to be looking at three four $500,000 Bitcoin. It’s just too big a story because governments all around the world would have to do it.”

Hougan admitted that he was first skeptical about Trump suggestions to establish a SBR. “But over the months, it hasn’t gone away in fact we continue to see leaders in the Trump Administration suggest that they’re open to it,” Hougan remarked. The Bitcoin CIO still thinks that the odds of the US government buying Bitcoin is less than 50%, but “it’s not zero,” he added. “If it happens or if we start to see it happening in other countries, you’re going to see a rip up in Bitcoin that will make 2024 look pretty docel in comparison.”

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Hougan also highlighted the role of institutional platforms, specifically citing Coinbase as a potential major beneficiary in the evolving crypto landscape. “Coinbase is currently about half the size of Charles Schwab, and we believe it could surpass Schwab in brokerage size,” he noted.

“Coinbase hasn’t had major competitors bubbling up to challenge it; it’s sort of had a degree of regulatory capture, if you can believe it. As a result, it’s been able to sustain its high margins in brokerages and then layer on things like stablecoins. [..,.] It’ll also help if it gets into the S&P 500; you see institutions buying it broadly. I think it’s a really unique situation driven by the fact that there was so much regulatory uncertainty—it cleared the competitive fat path and now it’s going to reap those rewards and build a really, you know, maybe an unsalable position leading this industry in the US.”

Looking ahead to the broader market, Hougan anticipated an influx of crypto-related companies entering public markets. “We can expect firms like Kraken, Anchorage, and Chainalysis to go public, further normalizing the industry,” he stated. “This influx will lead to increased Wall Street coverage and institutional investment, setting the stage for a robust IPO window in 2025.”

Despite the optimistic outlook, Hougan acknowledged potential risks that could impede Bitcoin’s growth. “The biggest risk is that politicians don’t deliver on their promises—if we don’t achieve regulatory clarity or fail to establish a strategic reserve, the expected bull market might not materialize,” he cautioned. “Regulatory and political factors are crucial drivers for crypto in 2025, and any setbacks in these areas could pose significant challenges.”

At press time, Bitcoin traded at $104,212.

Featured image created with DALL.E, chart from TradingView.com