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February 6, 2025

Bitcoin on the Cusp of a New All-Time High: Will it Sustain the Bullish Momentum? as reported by Bitcoinethereumnews.com

The cryptocurrency market is abuzz with excitement as Bitcoin (BTC) is on the verge of retesting its previous all-time high (ATH) of $108,363, achieved just four weeks ago. The king of cryptocurrencies has been on a tear, rallying by over 18% in the past week, with its price briefly surpassing $105,000 for the second time in seven days.

This latest surge has sparked hopes of a potential price discovery, where Bitcoin’s value could venture into uncharted territory. The Relative Strength Index (RSI) indicates that there is still room for further upside, but the timing of this rally raises questions about its sustainability.

The Trump Factor: Will the Inauguration Fuel or Fizzle the Rally?

The upcoming inauguration of President Trump has been a significant catalyst for Bitcoin’s recent price action. The cryptocurrency has historically performed well in the lead-up to major events, only to experience a sell-off afterwards. This phenomenon, known as “sell the news,” could potentially play out again, leading to a double top and a bearish outcome.

However, there is also a possibility that the inauguration could trigger increased liquidity inflows, particularly if President Trump follows through on his plan to issue an executive order for the creation of a strategic Bitcoin reserve. This move could be a game-changer for the cryptocurrency, attracting more institutional investors and fueling further growth.

Whale Activity: A Tale of Two Rallies

Interestingly, the latest demand wave driving Bitcoin’s rally has been characterized by relatively subdued whale activity. Unlike the November and December upticks, which saw significant large holder netflows, the current rally has been driven more by retail investors. This lack of whale participation suggests that the market is not yet experiencing the same level of excitement as it did during the previous rallies.

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Derivatives Demand and Exchange Flows: A Mixed Bag

While demand in the derivatives segment has been slightly higher than its December peak, exchange flows have cooled off significantly in the past two days. The latter has been a key driver of Bitcoin’s price action, with heavy exchange outflows supporting the bullish momentum. However, with exchange inflows now outperforming outflows, sell pressure could be building up, potentially leading to a selloff in the coming week.

The Verdict: A Price Discovery or a Retracement?

As the cryptocurrency market navigates this critical juncture, one thing is clear: the next few days will be crucial in determining the direction of Bitcoin’s price action. Will the inauguration of President Trump fuel further growth, or will it mark a turning point for the cryptocurrency? Only time will tell, but one thing is certain – the world will be watching with bated breath as Bitcoin teeters on the edge of a new all-time high.

Source: Bitcoinethereumnews.com

#CryptoExchange #NFT #Stablecoin #Altcoin

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