Bitcoin Spikes To $104,000, Traders Eye $130,000 Target In Late January

Bitcoin, the world's leading cryptocurrency, has surged to new heights, reaching $104,000 on January 18, 2025. This remarkable rally has left traders and investors eyeing a potential target of $130,000 in late January. The recent price surge can be attributed to several key factors, including institutional adoption, the Bitcoin halving event, and the anticipation of crypto-friendly policies from the incoming US administration.



Institutional adoption has played a significant role in Bitcoin's recent price surge. The approval of Bitcoin ETFs in January 2024 led to substantial inflows from institutional investors, driving up demand and prices. Fidelity's Bitcoin ETF alone added 183,695 BTC, representing a massive capital influx of nearly $237.27 million. This increased institutional interest has contributed to the surge in Bitcoin's price.

The Bitcoin halving event on April 19, 2024, reduced the block mining reward by half, from 6.25 BTC per mined block to 3.125 BTC per mined block. This event typically leads to a decrease in supply and an increase in demand, driving up prices. Despite the significance of this event, it occurred with little fanfare, and Bitcoin's price remained relatively stable at around $64,000 at that time. However, the effects of the halving event are now being felt, contributing to the recent price surge.



The anticipation of crypto-friendly policies from the incoming US administration, led by President-elect Donald Trump, has also fueled the recent price surge. Many expect Trump to execute his crypto promises, such as creating a Strategic Bitcoin Reserve and making the US the center of innovation. This event could catalyze a crypto market rally, potentially pushing Bitcoin's price to new highs.



Technical indicators also suggest a potential rally to $130,000 in late January. Bitcoin's rally from the January 13 low has pushed it beyond the $90K to $100K range that BTC has been consolidating for the past 65 days. This development has tilted the odds in bulls' favor and hints at an upcoming rally. If history repeats, then Bitcoin could consolidate above the range high of $100K for the next 11 days. Following this, an exponential rally could unfold, sending it toward the 161.8% Fibonacci extension level at $131,055.



However, investors should remain cautious due to on-chain data hints at caution. Despite the recent breakout of BTC price above the range high of $100K, the daily active addresses (DAA) metric continues to trend lower. Since the all-time high in December 2024, the DAA has produced lower highs. Currently, the metric hovers around 773,000. This suggests that while the price is rallying, there may not be as much conviction or interest from users, which could indicate a potential correction or consolidation phase.

In conclusion, Bitcoin's recent price surge to $104,000 can be attributed to institutional adoption, the Bitcoin halving event, and the anticipation of crypto-friendly policies from the incoming US administration. Technical indicators suggest a potential rally to $130,000 in late January. However, investors should remain cautious due to on-chain data hints at caution. As always, it is essential to stay informed and make well-researched decisions when investing in the volatile cryptocurrency market.