Bitcoin crosses $100K as peak of market bulls eye cycle

Key Takeaways

Bitcoin regains $100K as the year begins, with Bitfinex indicating that miners are holding on to their BTC.
CryptoQuant analyst predicts the top of the market by Q1 or early Q2 2025.

Bitcoin has regained the $100,000 mark as 2025 begins, driven by strong market momentum and tightening of sell-side liquidity.

According to the latest Report on the financial results of the annual income of the company Bitfinexthe Inventory Liquidity Ratio, a measure of how long the existing supply of Bitcoin can meet demand, has fallen from 41 months in October to just 6.6 months.

This sharp decline indicates a significant tightening of the available supply of Bitcoin, indicating that demand is increasingly higher than the liquidity of the sale.

The increase past $100,000 follows a remarkable 61% rally at the end of 2024, driven by optimism about the election of Donald Trump as the 47th US president.

Bitcoin reached an all-time high of $108,100 in December before suffering a 15% correction, only to recover strongly as selling pressures eased.

A key factor in this trend, according to Bitfinex, is reduced miner activity, with miner-to-exchange flows now at multi-year levels.

The 2024 halved rewards, encouraging miners to hold their BTC amid favorable market conditions, tightening supply and supporting prices.

Adding to the analysis, CryptoQuant metrics indicate that the crypto market is entering the latest stages of the current bull cycle, which began in January 2023.

CryptoDan Analyst notes that 36% of the Bitcoin supply has been traded within the past month, an indication of increased activity in the market.

Although this figure is lower than previous cycle peaks, it indicates that the market is likely to be nearing its peak, with a peak expected by Q1 or Q2 2025.

However, CryptoDan warns against exaggeration, emphasizing the dangers of overheating the market while it is near its peak.

“Big gains in Bitcoin and altcoins are still possible, but risk management is critical at this stage. I plan to sell my holdings gradually,” he explained.

Bitcoin's recovery to $100,000 is also supported by broader macroeconomic trends. The US labor market ended 2024 on a strong note, strengthening risk asset demand.

However, uncertainty in sectors such as manufacturing and construction are showing mixed signals, adding a layer of complexity to market sentiment.