Bitcoin's price has been fluctuating around $97,300 as of Dec. 2, 2024, and is struggling to break past the $100,000 mark. Analysts believe the cryptocurrency is facing resistance at this key level due to profit-taking and a large sell wall with more than 4,000 Bitcoins, worth approximately $384 million. Despite growing investor confidence and strong market factors, Bitcoin has not yet surpassed $100,000, with traders hesitant to push higher without clearing these sell orders.
In the past few days, Bitcoin's price dropped by nearly 2% to about $95,000 before recovering slightly. The cryptocurrency has been trading between $90,000 and $98,000 for the last two weeks, finding it difficult to gain momentum. Bitcoin faces resistance at multiple levels, particularly in the $97,700-$97,800 range, and must break through those levels to approach $100,000.
The broader economic environment is also impacting Bitcoin's performance. The U.S. Federal Reserve's interest rate policy is a key factor in market sentiment. Recently, the probability of a rate cut in December has decreased from 67% to 61%, which has created pressure on risk assets like Bitcoin. Additionally, the strengthening U.S. dollar has made cryptocurrencies less attractive to investors, tightening global liquidity.
The U.S. dollar has been rising steadily, with the Dollar Index (DXY) increasing from 103.42 to 106.22 since the U.S. election on Nov. 5. As expectations shift regarding the Federal Reserve's actions, such as the upcoming Nonfarm Payrolls report and speeches by Fed officials, investors are closely watching the dollar’s strength and its potential impact on Bitcoin.
Despite these challenges, Bitcoin’s long-term outlook remains optimistic. Institutional adoption continues to grow, with increasing interest in exchange-traded funds (ETFs) and significant liquidity injections, such as Tether's $14 billion issuance of new tokens. Geopolitical developments, such as Morocco’s favorable stance on cryptocurrencies and a $50 million Bitcoin investment from China’s SOS Limited, have also contributed to positive sentiment in the market.
On-chain data offers additional optimism, with the Spent Output Profit Ratio (SOPR) showing signs of a "golden cross," a pattern historically linked to price increases. Analysts, including Charles Edwards of Capriole Investments, view the current market as similar to early stages of parabolic growth cycles, presenting significant opportunities for long-term positions.
As Bitcoin continues to consolidate around $97,300, the coming week will be crucial. Investors await clearer signals from events like the Federal Reserve's decisions and economic reports. These developments will play a key role in determining Bitcoin’s direction, especially its potential to break through the $100,000 level.
