Traders in the market have set their sights on a price target of $120,000 for Bitcoin [BTC] by the end of March. Nonetheless, the latest positioning of institutional players in the market and prevailing macroeconomic challenges may hinder the realization of this projection.
In its most recent weekly report, Crypto Options analytics company Amberdata highlighted persistent U.S. inflation as a near-term risk for BTC and the broader market. A segment of the report stated,
“In the upcoming week, further insights on inflation will be revealed through the PPI data on Tuesday and the CPI release on Wednesday. A robust economy coupled with an upward trend in inflation could spell bearish outcomes for bonds, consequently affecting stocks and other risky assets as well.”
The market correction witnessed last week, accompanied by BTC testing its lower range, was initiated by mounting speculations of potential reductions in Fed interest rates in 2025. In fact, the markets were reflecting a staggering 98% probability that the forthcoming Fed rate announcement on January 31 would remain unaltered.
Analyzers at Coinbase recently expressed a similarly cautious stance, primarily influenced by macroeconomic dynamics and the supply volume emanating from long-standing BTC holders. Their contention was that the upward potential for BTC in the short run could be restricted.
Anticipated $120,000 Mark for Bitcoin
The majority of forecasts envisioning a surge in BTC value beyond $100,000 are hinged on the optimistic policy directives anticipated from incoming President Donald Trump in the cryptocurrency sector, which includes the implementation of a strategic Bitcoin reserve (SBR).
Nonetheless, Amberdata has advised that these policy anticipations have probably been factored into the current market prices. Additionally, the firm pointed out that institutional traders have been leaning towards a potential decline in BTC value to $55,000. This stance might further impede the intended goal of $120,000.
“Scrutinizing the significant block transactions, institutional players appear to hold a theoretical bullish outlook on Bitcoin’s prices. However, instead of procuring call options, they are vending March $55,000 Puts and June $55,000 Puts (engaging in volatility shorting rather than volatility buying).”
Puts options symbolize bearish forecasts typically linked with prominent entities safeguarding against adverse market outcomes.
Amderdata proceeded to mention that the act of vending puts rather than acquiring them could mitigate implied volatility, thus hinting at subdued price fluctuations (rendering more price constancy), which might curtail a robust ascent to $120,000.
At the current juncture, BTC has exceeded the $95,000 threshold, prompted by a surge in liquidity at $96,000 (highlighted in bright yellow). Additional liquidity clusters were discerned at $99,000 and $90,000, potentially exerting an additional impact on price movements.