Bitcoin (BTC) May Not Rebound to Its January $109,000 All-Time High (ATH) as Quickly as Some Hope

Bitcoin’s latest pullback amid broader macroeconomic uncertainty may not see it rebound to its January $109,000 all-time high (ATH) as quickly as some hope, an analyst says.

Bitcoin’s latest pullback amid broader macroeconomic uncertainty may not see it rebound to its January all-time high (ATH) as quickly as some hope, an analyst says.

CryptoQuant contributor XBTManager said in a March 5 analyst note that we should assume that we are in the pullback phase after the ATH and will likely continue to consolidate for some time due to liquidity needs.

Bitcoin long bids ‘viable’ when long-term holders back to buying

Once short-term holders of Bitcoin (BTC) — those holding for under 155 days — start selling, and long-term holders start buying again, long positions will become viable. Until then, traders should be risk-averse when entering positions in the asset.

In the days leading up to Bitcoin reaching $109,000 for the first time on Jan. 20, before US President Donald Trump’s inauguration, short-term holders began increasing their supply, while long-term holders reduced theirs through selling.

Bitcoin’s $109,000 high on Jan. 20 led to a drop of around 100,000 BTC in long-term holder supply over the following 30 days, but an even larger decline followed in December when it first hit six figures.

Bitcoin is down 1.43% over the past seven days. Source: CoinMarketCap

On Dec. 1, long-term holder supply reached 15.2 million BTC, just four days before Bitcoin reached $100,000 on Dec. 5, according to Bitbo data. By Dec. 20, it declined to 14.7 million.

Related: Bitcoin no longer ‘safe haven’ as $82K BTC price dive leaves gold on top

At the time of publication, long-term holder supply is 14.4 million BTC, a decline of 800,000 BTC since Dec. 1.

Bitcoin retraced below $100,000 on Feb. 4 amid fears of a trade war on Trump’s promised tariffs. It fell even lower to $85,000 at the Feb. 27 Wall Street open as markets digested confirmation of new US tariffs.

According to Johns Hopkins University, the first case of COVID-19 was reported in December 2019 in Wuhan, China. The virus then spread rapidly to other parts of the world, including the United States, where the first case was confirmed in January 2020.

The pandemic had a devastating impact on the global economy, leading to widespread job losses, business closures and a sharp decline in economic activity. In the United States alone, more than 50 million people filed for unemployment benefits in the first seven months of 2020.

The U.S. Travel Association estimates that the pandemic will cause a $505 billion loss in direct travel spending in 2020.

The pandemic also had a significant impact on the stock market, with the Dow Jones Industrial Average falling more than 20% in the first quarter of 2020. The S&P 500 also declined sharply, while the Nasdaq 100 remained relatively flat.

The Federal Reserve responded to the crisis by cutting interest rates to near zero and launching several programs to provide liquidity to the banking system and credit markets.

The U.S. government also passed a $2.2 trillion stimulus package in March 2020 to help mitigate the pandemic’s economic fallout. The package included direct payments to taxpayers, enhanced unemployment benefits and loans to small businesses.

The pandemic also had a mixed impact on cryptocurrency prices. Bitcoin and other major coins saw significant declines in March 2020 as the crisis unfolded. However, cryptocurrency markets began to rebound in April 2020 as the initial shock subsided and governments implemented stimulus measures.

By the end of 2020, Bitcoin had made strong gains to reach a new all-time high above $198,000. These gains were driven by a combination of factors, including the U.S. presidential election, institutional interest in crypto and the ongoing narrative of a Bitcoin bull market.

Later that day, the asset plummeted below the crucial $80,000 price level, erasing nearly all the gains made after Trump was elected president on Nov. 5.

At the time of publication, Bitcoin is trading at $87,100, according to CoinMarketCap.

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