Bitcoin Price Outlook: Uncertain Path to $120K Amid Inflation Concerns and Market Sentiment

Mapping Bitcoin’s road to $120K and the odds of hitting that level in Q1

The cryptocurrency market has been witnessing a flurry of activity in recent times, with many investors eyeing a significant surge in Bitcoin (BTC) prices. However, Amberdata’s latest update suggests that the journey to $120K might be delayed due to various macroeconomic headwinds.

As per the report, the likelihood of reaching this target by Q1 seems uncertain, given the sticky U.S inflation and institutional positioning. According to the analytics firm, Bitcoin’s trajectory could be impacted in the short term. The statement from Amberdata read, “This upcoming week, we’ll get more color on inflation with Tuesday’s PPI and Wednesday’s CPI release. A strong economy and inflation pickup would be the bearish scenario for bonds. This would trickle into stocks and risk-assets as a secondary effect.”

The market has already seen a correction last week, which led to Bitcoin retesting its range lows. The recent dip can be attributed to growing expectations of fewer Fed rate cuts in 2025. In fact, markets were pricing a nearly 98% chance that the next Fed rate decision on January 31 would remain unchanged.

Coinbase analysts recently shared a similar outlook, driven by macro factors and supply from long-term holders. They emphasized that BTC’s upside could be limited in the short term. While some still hold onto the possibility of President-elect Donald Trump’s positive policy announcements driving prices above $100K, Amberdata cautions that these updates have likely been priced into the market.

Moreover, institutional traders have been placing bearish bets by selling March and June puts at $55K, rather than buying calls to gain from a potential surge. This could further slow down the possibility of reaching $120K in Q1.

The data from Amberdata highlights that top block trades are also theoretically bullish on Bitcoin prices but instead of taking long positions, they’re shorting volatility rather than betting on it. This bears witness to muted price swings and reduced potential for a strong move above $120K.

At press time, BTC had broken the $95K mark, driven by a liquidity sweep at $96K, with additional pockets of liquidity found at $99K and $90K, which could have an impact on future price action.

Source: ambcrypto.com