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Bitcoin's Price Drops, Bulls Eye $120k Despite Seasonal Optimism

Coin WorldThursday, Feb 6, 2025 7:38 pm ET

1min read

Bitcoin's price has been on a downward trajectory this week, briefly dipping below $95,600 during trading hours. The crypto asset has been consolidating around a demand zone between $94,300 and $95,800, with a liquidity sweep of equal lows around $96,200. However, a clear bullish reversal has yet to materialize in the short term.

Despite the current consolidation phase, some analysts remain optimistic about Bitcoin's potential to reach new heights. Mikybull, a crypto analyst, pointed out that if Bitcoin follows its seasonal pattern from 2018 to 2014, it could potentially reach a new all-time high of $120,000. The chart illustrates an average uptrend for Bitcoin during February, and with respect to seasonality data, it is currently on track to trend higher in 2025 as well.

Historically, Bitcoin has delivered an average return of 14.08% in February, with the month ending in a decline only twice in the past decade. Its average Q1 returns stand at 52.43%, behind Q4's average returns of 84% since inception. Danny Marques, a markets researcher, also believed that BTC's recent drop down to $91,000 was the local bottom, predicting that Bitcoin will be going to $120k+ sooner than expected.

However, not all analysts share the same bullish sentiment. Alphractal, a data analysis platform, highlighted leverage trading as Bitcoin's "greatest risk" which may open the possibility of a $80,000 retest. The analytics platform noted a significant liquidity gap between $72,000 and $86,000, where low trading activity took place, and a sharp drop below $80,000 remains a possibility to liquidate the long positions built since November 2024.

While there is also a cluster of short positions just above $111,000, there are twice as many longs compared to shorts. Additionally, the decrease in open interest from $76 billion to $59 billion implied a reduction in the use of leverage in the market, which could signal less risk appetite among traders, potentially affecting Bitcoin's price stability over the

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