The trend of BTC after returning to key positions has various possibilities. Here are some analyses:
Technical analysis level
• If it can maintain key positions, such as the current $98,000 and $100,000 key points, then from a technical chart perspective, it is expected to form a new upward trend, opening up space for further increases, and may move towards higher target prices.
• If the key position cannot be effectively maintained and a pullback breaks through the key support level, such as the support of $98,000, it may trigger a larger decline, potentially returning to the previous range bottom to seek support.
Market sentiment level
• Positive market sentiment will drive BTC to continue rising, as seen on December 11 when Bitcoin rose 4.5% to reclaim $100,000, which occurred against the backdrop of increasing market confidence in the Federal Reserve's rate cut in December.
• If market panic spreads, such as significant declines triggering a large number of investors to be liquidated, it will lead to a rapid decline in BTC prices. For example, on December 10, Bitcoin futures fell about 5%, briefly dropping below $95,000, which triggered a widespread decline in cryptocurrency-related stocks.
Macroeconomic level
• Global economic growth expectations are positive, monetary policies in various countries remain loose, market liquidity is abundant, and funds will flow into risk assets including BTC, driving its price up.
• If economic data is poor, causing concerns about economic recession, or if central banks in various countries begin to tighten monetary policies and raise interest rates to curb inflation, then market funds will flow back to traditional safe-haven assets, and BTC prices will face downward pressure.
Policy and regulatory level
• If the regulatory policies of governments regarding Bitcoin gradually become clearer and more standardized, such as major economies like the United States recognizing Bitcoin's legal status or introducing reasonable regulatory laws, this will enhance market confidence and promote BTC price increases.
• If regulatory policies tighten, such as strengthening restrictions on cryptocurrency trading or prohibiting financial institutions from participating in Bitcoin-related businesses, this will lead to market panic, causing BTC prices to drop significantly.
Supply and demand relationship level
• From the supply side, the total supply limit of Bitcoin is 21 million coins. As the mining output slows down, the reduction in supply will push prices up.
• From the demand side, the continued entry of institutional investors, the increasing recognition and acceptance of Bitcoin globally, and the continuous expansion of payment scenarios will all increase the market's demand for Bitcoin, thereby driving its price up.