Bitcoin dances close to $100K: Market euphoria or solid momentum?

Bitcoin is currently trading near $96,470, just under its all-time high of $99,655, following a volatile week where its price dipped to $90,770 before recovering. As it nears the $100,000 mark, the cryptocurrency market is buzzing with anticipation. But the question remains: is this a sign of solid momentum or a temporary market euphoria?

Edul Patel, CEO and co-founder of Mudrex, pointed out that the recent Bitcoin rally has been driven by strong institutional adoption and growing positive sentiment. He noted that the rally could lead to further global adoption, particularly as nations like China and Morocco relax their cryptocurrency regulations. “Bitcoin is becoming more entrenched as a key player in the emerging digital economy,” Patel said, emphasizing the positive momentum despite short-term volatility.

Shivam Thakral, CEO of BuyUcoin, also expressed optimism, noting that Bitcoin’s current phase of consolidation suggests it is on the path to greater profitability. He added, “With positive sentiment and bullish predictions, Bitcoin seems poised for an exciting journey ahead,” further fueling expectations that Bitcoin could soon surpass the $100,000 mark.

However, not everyone is convinced that Bitcoin will maintain its upward trajectory. Crypto analyst Joe Consorti recently highlighted an important trend. He noted that Bitcoin’s price has historically followed the trend of M2 money supply, albeit with a 70-day lag. According to Consorti, the recent drop in M2 suggests that Bitcoin might soon see a price correction, potentially falling to key support levels around $88,000 or even $80,000 if the trend continues.

Bitcoin has tracked global M2 with a ~70-day lag since September 2023.

I don’t want to alarm anyone, but if it continues, bitcoin could be in for a 20-25% correction.

Global M2 in ⚪️
Bitcoin in 🟠 pic.twitter.com/PlPoaHUoFR

— Joe Consorti ⚡️ (@JoeConsorti) November 25, 2024

As Patel explained, “During a bull run, it’s common to see profit-taking, but these corrections often lead to further upward movement.” This view is shared by many analysts who believe that short-term dips are normal in a bull market. Despite Consorti’s warning, the general sentiment remains positive, with many investors confident that Bitcoin will eventually break through the $100,000 threshold.

Bitcoin’s recent volatility reflects the challenges it faces in reaching that milestone. But despite these fluctuations, the overall market sentiment continues to support Bitcoin’s long-term potential. With growing institutional interest, increasing global adoption, and continued optimism about its future, the $100,000 mark may just be the beginning for Bitcoin.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)