The Bitcoin price may be setting up for a breakout to $120,000, bolstered by a new all-time high of stablecoin reserves on cryptocurrency exchange Binance.
Bitcoin (BTC) may be poised for a rally following its 10% correction from the $108,300 all-time high recorded on Dec. 17, Cointelegraph Markets Pro data shows.
BTC/USD, 1-month chart. Source: Cointelegraph
Driven by United States President-elect Donald Trump’s upcoming inauguration on Jan. 20, BTC may peak above $120,000 during January, according to Ryan Lee, chief analyst at Biget Research.
Bitcoin could see a local top above $120,000 before a potential correction driven by profit-taking, the analyst told Cointelegraph, adding that the new year could also bring a “‘January effect,’ characterized by renewed investments and optimism, though profit-taking from 2024 gains may introduce market corrections, balancing bullish sentiment with caution.”
To gauge BTC’s performance, investors should be mindful of spot Bitcoin exchange-traded fund (ETF) inflows, the performance of the US stock market and incoming FTX repayments scheduled for Jan. 3, added Lee.
Lee’s predictions align with those of other analysts who foresee Bitcoin recapturing the six-figure price tag in January.
GMI total liquidity index, Bitcoin (RHS). Source: Raoul Pal
Based on Bitcoin’s correlation with the global liquidity index, BTC could peak at a local top above $110,000 in January before a potential correction.
Related: Confirmed Bitcoin payments hit yearly low due to holiday illiquidity
Bitcoin rally’s primary fuel: Binance’s $45 billion stablecoin reserves
BTC’s rally during January is set to benefit from nearly $45 billion worth of stablecoins awaiting deployment.
Stablecoin reserves on Binance surpassed $44.5 billion on Dec. 31, nearing the $45.8 billion all-time high registered on Dec. 11, CryptoQuant data shows.
Stablecoin exchange reserves, Binance. Source: CryptoQuant
On Dec. 11, BTC gained over 4.7% intra-day to close above $101,000, driven by stablecoin reserves.
BTC/USD, 1-day chart. TradingView/Cointelegraph
Increasing stablecoin inflows to crypto exchanges can signal incoming buying pressure and growing investor appetite, as stablecoins are the main investor on-ramp from fiat to the crypto world.
Related: Ethereum shorter gains $1.1M on 50X leverage in 2 days
Still, Bitcoin needs to overcome significant resistance above $95,000 and $96,400.
Bitcoin Exchange Liquidation Map. Source: CoinGlass
A potential move above $96,400 would liquidate over $1.24 billion worth of leveraged short positions across all crypto exchanges, CoinGlass data shows.
Analysts remain optimistic about Bitcoin’s 2025 trajectory, with some predicting a Bitcoin rally to $160,000 driven by improving US financial policy.
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