Key Takeaways
- Bitcoin Returns $100k As Year Begins, Bitfinex Reveals Miners Are Holding Their BTC.
- CryptoQuant analyst forecasts market peak by Q1 or early Q2 2025.
Bitcoin reclaimed the $100,000 mark as 2025 began, driven by strong market momentum and tightening sell-side liquidity.
According to the latest Bitfinex reportThe liquidity stock ratio, a measure of how long the existing supply of bitcoin can meet demand, fell from 41 months in October to just 6.6 months.
This sharp decline reflects a significant tightening of the available supply of Bitcoin, indicating growing demand that is outstripping sell-side liquidity.
The increase of over $100,000 followed a remarkable 61% rise in late 2024, driven by optimism surrounding the election of Donald Trump as the 47th President of the United States.
Bitcoin hit a high of $108,100 in December before experiencing a 15% correction, only to recover strongly as selling pressure eased.
A key factor in this trend, according to Bitfinex, is reduced miner activity, with flows from miners to exchanges now at multi-year lows.
The halving in 2024 reduced rewards, prompting miners to hold onto their BTC amid favorable market conditions, tightening supply and supporting prices.
Adding to the analysis, CryptoQuant’s metrics indicate that the crypto market is entering the later phase of the current bull cycle, which began in January 2023.
Analyst CryptoDan notes that 36% of Bitcoin stock has been traded in the past month, a sign of increased market activity.
While this figure is lower than the peaks of the previous cycle, it indicates that the market is likely approaching its zenith, with a peak expected in Q1 or Q2 2025.
However, CryptoDan cautions against overexertion, highlighting the risks of the market overheating as it nears a peak.
“Significant gains in Bitcoin and altcoins are still possible, but risk management is key at this stage. I plan to gradually sell my holdings,” he explained.
Bitcoin’s return to $100,000 is also supported by broader macroeconomic trends. The US labor market ended 2024 strong, fueling demand for risk assets.
However, uncertainties in sectors such as manufacturing and construction are presenting mixed signals, adding a layer of complexity to market sentiment.
