Bitcoin price rises to $106K with market sentiment at extreme greed

Bitcoin hit a new all-time high above $106,000 on December 15, which was driven by bullish sentiment, speculation about its potential as a US reserve asset, and supportive macroeconomic factors. Retail investors, especially smaller “shrimp wallets”, are very confident in the crypto as they accumulate BTC, even as long-term holders sell large amounts. Analysts predict some price volatility for BTC, but they still maintain a positive outlook for BTC's place in institutional portfolios. Meanwhile, Ethereum is showing potential for a major rally in 2025, with analysts eyeing targets between $6,000 and $8,800.

Bitcoin hits new heights

The price of Bitcoin is rallied nearly 5% on December 15, which helped it reach a new high high all the time over $106,000. Speculation that it could be a reserve fund for the United States also helped boost the price of BTC. CoinMarketCap database shows that Bitcoin peaked at $106,488 before retreating slightly to $104,736. This surpassed the previous high of $104,000 set on December 5th.

BTC price action over the past 24 hours (Source: CoinMarketCap)

According to CK Zheng, Chief Investment Officer of ZK Square, Bitcoin seems to have entered “Santa Claus mode”, with investors fearing that they might miss out and allocating more capital to the digital currency. Zheng projected that Bitcoin could crash $125,000 by early 2025 but also warned that a 30% correction could follow. This could bring the price back down to around $87,500. He believes much of the bullish sentiment is from earnings the Trump administration may already be included in the current price.

Speculation was also fueled by comments from the Strike Commander Jack Mallerswho suggested that President-elect Donald Trump could issue an executive order on his first day in office Bitcoin as a reserve asset. Traders believe that such a move could involve large-scale buying, although not on the scale of 1 million coins.

In addition, the CEO of Satoshi Action Fund Dennis Porterappeared a third Bitcoin reserve account being prepared at the state level. Porter predicted that at least 10 states could eventually introduce similar legislation.

On the macroeconomic side, financial analysts expect a 0.25% interest rate cut by the US Federal Reserve on December 18, which could provide even more momentum for Bitcoin's price in the coming months. Another contributing factor is the new rule from the Financial Accounting Standards Board, effective for fiscal years beginning after December 15, which allows institutions to more accurately record the value of their cryptocurrency holdings.

Crypto Fear and Greed Index (Source: Another option)

Bitcoin market sentiment remains strong as the Crypto Fear and Greed Index shows a score of 83, indicating “Extreme love.” This is the highest sentiment level since December 5 when Bitcoin jumped past the $100,000 milestone.

Small Bitcoin holders keep piling up

Bitcoin wallets with less than 1 BTC, known as “shrimp wallets,” are expected to grow by nearly 9% in the near term as small investors pile in, even as the price of Bitcoin remains high over $100,000. CryptoQuant Contributor Axel Adler highlighted this trend in a recent post, and shared that these smaller holders are showing strong confidence in Bitcoin's long-term growth potential. Currently, there are approximately 323,000 shrimp wallets, which is a figure that Adler expects to increase to 351,000 in the near future. changed so far +8.67% compared to yesterday.

Adler explained that this accumulation trend started when the price of Bitcoin was at $61,000, and at that time there were 265,000 shrimp addresses. Since then, the number has increased by 21.9%, which shows a steady selling interest in Bitcoin despite its recent high valuations.

While shrimp wallets show strong accumulation patterns, long term holdersholding Bitcoin for more than 155 days, has been selling large amounts of Bitcoin. Reports suggest that over the past 30 days alone, long-term holders sold 827,783 BTC, which could indicate a market top.

Despite the selling pressure from long-term holders, analysts believe that Bitcoin's near-term price drop may not be as severe as the 10% drop earlier this month. Bitfinex analysts shared in a recent one report that has resulted in profits and sell-side pressure has decreased, reducing the likelihood of a major decline like those suffered in Bitcoin's first spike above $100,000. This indicates that although the market has mixed signals, the growing sales interest from shrimp wallets could have a sustainable impact Bitcoin stock price history.

Will the US Bitcoin Reserve Lead to Volatility?

On the other hand, a crypto analyst warned the Senate Courtesy of Cynthia Lummis for the United States government to buy 5% of the Bitcoin supply leading to an increase in price volatility in the short term. Ben Simpsonfounder and CEO of Collective Shift, while such a move may initially increase the price of Bitcoin, it may lead to a pullback as the market adjusts to the news.

The proposal involves the US government buying and holding 1 million Bitcoins for at least 20 years, and especially gained a lot of traction after that. The impact of Donald Trump's presidential election on November 5. A crypto trader Mom he noticed this trend, and predicted an even greater decline in the dominance of Bitcoin as altcoins gain momentum. However, Simpson believes that the transition to altcoin season is likely to be volatile rather than straightforward.

Despite the potential instability, analysts at Bitfinex remain optimistic about Bitcoin's place in institutional portfolios. They noted that many altcoins have yet to achieve new highs against Bitcoin. Bitfinex Analysts also believes that any drop in the price of Bitcoin, even during the holiday season, is likely to be short-lived due to strong spot buying and reasonable leverage levels supporting the market.

Meanwhile, VanEck's recent global investment manager reaffirmed its $180,000 price target for Bitcoin in the current market cycle, and pointed out that the crypto bull market is only in its early stages.

Analysts predict Ethereum rally in 2025

Some analysts are also excited Ethereum is expected entering the new year. Ether could even surpass its previous all-time high in the first quarter of 2025, according to market analysts.

Despite not being able to hold above the $4,000 psychological threshold, ETH could be poised for a massive rally. A market report by Bybit and Block Scholes revealed that the recent crypto market devaluation could reset a long leveraged position, which could pave the way for Ethereum to catch up with Bitcoin winnings. Bybit analysts expect a new all-time high for Ethereum in Q1 of 2025, supported by strength in derivative markets and growing expectations for price capture.

Bitcoin, however, far outperformed Ethereum as an investment in 2024. BTC yielded 54% to return for the past six months compared to 12%. Despite this difference, analysts still believe that Ethereum could rally to $8,800 based on exchange rate ascending triangle creation of the daily schedule.

The key level to watch is $4,100, which, if broken, could move ETH towards the previous high of $4,865 and beyond. The Long Investor, a popular crypto analyst, is equally confident in the direction of ETH, and gave Ethereum a target of $8,800.

Historical patterns also support optimism for Ethereum. Venture Foundercrypto analyst, pointed out that Ethereum is usually lower than Bitcoin for up to eight months after a Bitcoin goes down by half before it really gained some momentum. As this cycle reaches its eighth month, the analyst predicts a possible ETH/BTC ratio of 0.39.

Investor interest in Ethereum is also growing, and the creation of more than 130,000 new Ethereum addresses per day in December is proof of this. New daily addresses hit an eight-month high last seen in April, according to data from holy.

Despite this strong feeling, some market participants are still a little cautious. VanEck, for example, set more reserve price target of $6,000 for Ethereum.