Crypto Weekly Digest | Bitcoin Under Pressure, but Institutions Buy the Dip! Key Support at $88,000 Highlighted - Is Now a Good Time to Buy?

1. Bitcoin price under pressure for several days, negative news involving US Department of Justice and Elon Musk

According to multiple media reports, the source of the latest market turbulence was an online court ruling: The US Department of Justice obtained approval from the Northern District Court of California to sell 69,370 Bitcoins seized from the illegal dark web market "Silk Road."

At a price of $94,000 per coin, this potential sell-off is close to $6.5 billion. It's currently unclear why this document, dated December 30 (last year), surfaced at this time, but it clearly caused a short-term impact on market sentiment.

Last Tuesday, commenting on YC CEO Garry Tan's post "If Musk's 'Government Efficiency Department' could reduce government spending, the price of Dogecoin would rise," the world's richest man bluntly stated that if the problem of US dollar inflation is resolved, other conditions remaining unchanged, the dollar price for purchasing cryptocurrencies would actually decrease.

2. Trump's cryptocurrency holdings value exceeds $10 million

Cointelegraph posted on X platform that Donald Trump's cryptocurrency holdings value has exceeded $10 million.

3. As Trump's inauguration day approaches, CEOs of multiple crypto companies are vying for opportunities to engage with Trump

Additionally, companies like Circle, Coinbase, Kraken, and Ondo have all pledged donations to Trump's inauguration ceremony. Previously, it was reported that the crypto industry will host a ball celebrating Trump and Vance's inauguration on January 17, organized by BTC Inc. and Stand With Crypto.

4. Institutions buying against the trend! Can BTC's pullback hide long-term bullish signals?

On-chain data from CryptoQuant shows that the "potential demand for Bitcoin remains very strong" in the market. The firm measures market demand by comparing the relationship between the amount of idle Bitcoin and the new supply of Bitcoin from miners. When the decrease in idle Bitcoin far exceeds the new supply, it indicates strong market demand.

A CryptoQuant analyst wrote that around December 21, 2024, institutional investors sold about 79,000 Bitcoins in a week, leading to a 15% market correction. However, large institutions subsequently used the market consolidation period to continuously buy below $95,000 using a time-weighted average price (TWAP) strategy. Over the past 30 days, institutional investors have accumulated over 34,000 Bitcoins, providing buying support for Bitcoin's recent rebound.

5. Looking back at history, can Bitcoin hit new highs in Q1?

Bitcoin has a strong cyclical effect. Looking at historical data, Bitcoin has performed well in Q1 of the second year after halving in the past. Specifically, it rose 539% in the first quarter of 2013, 103% in 2021, and 12% in 2017.

1. Analysis: Bitcoin short-term holder cost basis at $88,000 remains a key support level

Glassnode posted on X platform that the Bitcoin short-term holder cost basis ($88,000) remains a key support level. The URPD (Unrealized Price Distribution) indicator shows that if this cost basis is broken, and there's sparse trading volume below this support level, it means lack of buying support, and prices may accelerate downwards.

2. Former Barclays executive: Bitcoin may have completed its "correction wave," could rise to a historical high of $125,000 in Q1

John Glover, former managing director of Barclays Investment Bank, said that based on the Elliott Wave Theory technical analysis tool, Bitcoin is expected to break through $125,000 in the first quarter of 2025. He pointed out that earlier this week we saw Bitcoin fall below $92,000, but it may have now completed its correction wave. If Bitcoin breaks through $125,000, it might experience another pullback before moving towards the cycle top near $160,000.

It's worth noting that Elliott Wave Theory suggests asset prices in each cycle consist of five waves moving in the direction of the main trend and three corrective waves moving against the trend, with each corrective wave following a wave in the direction of the main trend.

3. Fidelity Investments: More countries will start buying Bitcoin in 2025

According to a report by Fidelity, governments around the world will finally end years of silence on purchasing Bitcoin and start investing in cryptocurrencies in 2025. If Fidelity's prediction proves correct, it would mark a significant change in how most countries approach Bitcoin. Since Bitcoin was created 16 years ago, many countries have opposed establishing Bitcoin reserves alongside traditional foreign exchange and gold reserves, citing risks and lack of regulatory transparency.

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