Why do traders retreat?

Today, the cryptocurrency market is seeing the price of Bitcoin (BTC) rise above $100,000, and people have been intrigued as a result. This significant psychological level has revived investors’ hope after prices stagnated at a certain range. However, not all traders are thrilled about this rise due to stress factors in the market.

Bitcoin price exceeds $100,000 amid market rally

According to market statistics, on Monday, it rose by 3.91% from $98,340 to $102,185. This surge brought altcoins to a boil and set a higher pace for the overall cryptocurrency market. However, the bulls are struggling around the 161.8% Fibonacci retracement level at $102,306, which is a magnet for bearish reversal traders.

This key level remains alert by traders as seen on the hourly BTC/USDT chart. The sharp increase in open interest is also contributing to a further worsening of the market outlook. TradingRiot Analyst Adam said, “If open interest gains momentum, buyers or sellers tend to unload it before continuing.”

Warning about the US Dollar Index and Fractals

However, the trading community is closely monitoring the rise in the price of Bitcoin and the US Dollar Index (DXY). As such, any decline in DXY is usually associated with an increase in riskier assets like Bitcoin. Cryptocurrency analyst BluntzCapital expressed this His opinion on the DXY chart reveals that if DXY drops below 99, a correction will be beneficial for Bitcoin.

But as the analyst also previously noted, both Bitcoin and stocks held higher during DXY’s recent bounce suggesting chaos in emerging markets. The Bitcoin price projection from early 2025 fractals means that Bitcoin could come back to sweep the December lows in 2024 before rising. Analyst and trader Immortal encryption points This statement was issued by traders, stating that pattern tracking has been extended from May 2024.

Market sentiment and liquidation risk

It also caused more trading activity this week. Short squeezes amounted to $130 million According to the CoinGlass website. This is optimistic and indicates that if Bitcoin’s price turns south the entire market will be in serious liquidation mode.

Idul Patel, CEO of Mudrex, said:“BTC spot ETFs added $759 million in inflows, which built on $900 million from the previous trading session to push Bitcoin into the six figures.” Political expectations, such as Canadian candidate Poilievre assuming the leadership, also gave general positivity to the market.

Sometimes, the prices of other altcoins like Ai16z, Worldcoin, and Render rose due to the improving Bitcoin trend. However, these asset prices are still dependent on a correction if Bitcoin goes bad.

Broader market expectations

The new year means new hopes for Bitcoin as its price swings into six-figure territory for the first time since December 2024. Bitcoin price $101,780 With an intraday high of $102,712.

The market continues to watch the trends as traders are starting to feel hopeful but are still evaluating areas of resistance levels and other features in the overall market. Therefore, future trading price action will hinge on Bitcoin’s ability to maintain this range and hurdle through the resistance level of around $102,306.

Some important factors that are likely to emerge in a big way and possibly push the cryptocurrency in the coming weeks are ETF inflows and changes in global market sentiment as they continue to occur.