Bitcoin's 12% rally sparks $100,000 predictions, but analysts warn of volatility

Bitcoin's recent 12% rally and significant inflows into related exchange-traded funds have led some analysts to predict that the cryptocurrency could soon reach $100,000. However, one crypto analyst has urged caution, noting that a key indicator—stablecoin minting activity—has not yet returned to high-activity levels, suggesting that the sustainability of the current rally may be in question.

Markus Thielen, head of research at 10x Research, explained that while a measured move from the falling wedge pattern indicates that Bitcoin could reclaim $99,000, the absence of strong stablecoin inflows raises doubts about the rally's follow-through. Stablecoin inflows, according to Thielen, tend to correlate strongly with stickier money, whereas an increase in futures leverage might simply indicate that fast traders are capitalizing on a quick price move.

Thielen's caution comes as spot Bitcoin ETFs in the US posted inflows of $912.7 million on April 22, the highest level since January 17. Pav Hundal, lead analyst at Swyftx, suggested that these inflows indicate a true, demand-led rally rather than a fleeting surge driven by futures traders. Hundal also noted that if market uncertainty continues to decline, a further acceleration could provide the liquidity needed to support a more sustained rally.

Thielen identified the $95,000 price level as a key resistance level for Bitcoin, describing it as a potential trigger point for short-stop liquidations. If market strength continues, this could push Bitcoin's price higher. However, the analyst's overall message is one of caution, reminding investors that while Bitcoin has shown remarkable growth, it remains a highly volatile asset. Investors should be prepared for significant price swings and consider all available indicators when making investment decisions.