Bitcoin Needs Boost in Trading Volume to Surpass $105K in January

Bitcoin's momentum remains sluggish as analysts call for a significant increase in trading volume for the cryptocurrency to reclaim its six-figure price range. Despite an optimistic outlook for January, the digital asset has yet to recover from the holiday-driven market illiquidity that contributed to a notable price correction in December.

Bitcoin's Price Struggles After Record High

Bitcoin (BTC) is currently trading below the $100,000 mark, over 10% down from its all-time high of $108,300, which it achieved on December 17. Since December 19, Bitcoin has consistently remained under the $100,000 threshold, according to Cointelegraph Markets Pro data. Analysts are forecasting a potential recovery, but there are indications that a boost in trading volume is critical for any significant price rally.

Despite these challenges, analysts from Bitfinex are optimistic about Bitcoin’s price movement in January. They predict that Bitcoin could range between $95,000 and $110,000 by the end of the month, signaling a potential recovery from the recent market slowdown.

“We expect Bitcoin to see range-bound markets as investors deploy capital across various asset classes. We see Bitcoin ranging between $95,000 and $110,000 by the end of January,” Bitfinex analysts explained.

A Key Catalyst: U.S. Politics

A significant potential catalyst for Bitcoin’s price trajectory could be the inauguration of United States President-elect Donald Trump on January 20. Analysts believe that the incoming administration will likely introduce more crypto-friendly regulations and economic policies that could benefit the broader cryptocurrency market.

However, Bitfinex analysts caution that while the new presidency could help clear regulatory uncertainties, it may not result in an immediate price surge. “We expect the new presidency to bring more clarity to crypto policies, but we do not foresee the inauguration as a significant price appreciation event. Instead, it could serve as a precursor to establishing a clearer, less obstructed path for crypto in the U.S.,” they said.

While the political shift may not trigger an immediate rally, many are eyeing 2025 as a potential breakout year for Bitcoin, with some analysts predicting prices could top $200,000, fueled by growing institutional interest and the development of Bitcoin-focused financial products like spot Bitcoin exchange-traded funds (ETFs), which are nearing $110 billion in assets under management.

Recovery Hinges on Trading Volume

Despite the positive outlook for Bitcoin’s long-term trajectory, analysts are quick to point out that the asset is currently constrained by lower-than-usual trading volume. CryptoQuant analyst Axel Adler highlighted that Bitcoin's price recovery depends on stronger market participation.

“For a strong impulse, we lack sufficient trading volume. Therefore, we are waiting for the market to recover from the holiday season,” Adler wrote in a post on X (formerly Twitter) on January 4.

Bitcoin’s daily trading volume has significantly decreased since it first surpassed the $100,000 milestone on December 5. On January 3, Bitcoin saw just $66.7 million in daily trading volume, a staggering 91% drop from the $743 million recorded on December 5. This decline in volume is largely attributed to the seasonal market slowdown, which has left Bitcoin in a range-bound market with limited price movement.

Long-Term Bitcoin Outlook Remains Positive

Despite the current market conditions, analysts remain bullish on Bitcoin's long-term prospects. Predictions for Bitcoin's price in 2025 range from $160,000 to $200,000, driven by expectations of improved U.S. financial policies, a growing risk appetite among investors, and the continued maturation of the cryptocurrency market. As market liquidity improves and institutional interest continues to grow, Bitcoin's prospects for a significant price surge remain intact.

While Bitcoin’s short-term performance is tied to market volume and liquidity, the broader narrative points toward a continued positive outlook, especially as the regulatory landscape for cryptocurrencies becomes clearer and more supportive. Investors and analysts alike are closely monitoring the evolving market dynamics and political shifts, which could set the stage for Bitcoin's next major rally.