On January 13, 2025, Bitcoin reserves across all cryptocurrency exchanges plummeted to 2.35 million BTC, marking a near seven-year low not seen since June 2018 when Bitcoin traded above $7,000. This decline is attributed to continued institutional buying, indicating a potential supply shock that could lead to a price rally.
Institutional investors, particularly crypto hedge funds, are capitalizing on the current dip, with a notable increase in market exposure to Bitcoin. In December 2024, US spot Bitcoin ETFs purchased nearly three times the 14,000 coins mined, coinciding with Bitcoin reaching an all-time high of $108,300 on December 17.
Despite the promising trajectory for Bitcoin, analysts highlight the $100,000 psychological resistance as a significant barrier to further gains. Current trading activity is low, with a lack of momentum to break through resistance levels, as noted by Ryan Lee, chief analyst at Bitget Research.
Moreover, the broader crypto market is experiencing a trading volume slump, the lowest since before the US elections, suggesting a 'trading paralysis' that could increase the likelihood of rebounds. Analysts remain optimistic, projecting Bitcoin could reach a cycle top above $150,000 by late 2025, fueled by a predicted $20 trillion increase in the global money supply.