What are the top three factors that will drive BTC price above $125,000 in Q1?

Author: Frances Yue, Market Watch; Compiler: Deng Tong, Golden Finance

One analyst said that Bitcoin could rise to a record high of more than $125,000 in the first quarter, or it could fall to $77,000 - the key lies in whether President-elect Donald Trump will deliver on his promises to the cryptocurrency industry shortly after taking office.

John Glover, chief investment officer of crypto lending platform Ledn and former managing director of Barclays Investment Bank, said that based on the technical analysis tool Elliott Wave Theory, Bitcoin is expected to fall to $89,000 and then break through $125,000 in the first quarter of 2025.

Elliott Wave Theory believes that asset prices consist of five waves in the direction of the main trend and three counter-trend correction waves in each cycle. Each correction wave follows a wave in the direction of the main trend.

“Earlier this week, we saw bitcoin fall below $92,000, so we may have completed the correction wave before heading towards $125,000,” Glover said in a phone interview.

If bitcoin breaks through $125,000, it could experience another pullback before approaching the cycle high of $160,000, Glover said.

Glover said bitcoin could see a pullback ahead of Trump’s inauguration on Jan. 20 as investors take profits.

Crypto bulls expect the regulatory environment to become more favorable under Trump’s presidency. They are watching to see whether the new president will soon follow through on his promises to the cryptocurrency industry, particularly his pledge to build a strategic bitcoin reserve in the U.S., though Trump has yet to detail any specific plans.

Glover said bitcoin could see a pullback if Trump doesn’t take any action early in his administration to follow through on his promises — especially in his first 100 days in office. Politicians and analysts often use the first 100 days of an administration as a gauge of how effective and impactful a new U.S. president may be.

However, Glover noted that based on the technical setup, it is unlikely that Bitcoin will fall below $77,000.

Analysts at blockchain data platform Glassnode said investors should also keep an eye on the $87,000 level, which is Bitcoin's short-term holding cost basis assuming the cryptocurrency is fairly valued. This "on-chain" analysis examines data recorded directly on the blockchain network to gain insight into market trends or investor behavior.

Analysts noted that there is a demand gap between $87,000 and $71,000 for Bitcoin prices, making the former a "make or break" level for Bitcoin's short-term price. Glassnode analysts said the level acted as support during the uptrend; however, if decisively broken, Bitcoin's price could turn into resistance, indicating a shift in market sentiment.

QCP Capital analysts said Another key catalyst for Bitcoin in January could be portfolio rebalancing by financial institutions. Hedge funds and asset managers often choose to rebalance their portfolios in January to develop full-year strategies, adapt to market conditions, and optimize tax impacts.

QCP analysts noted that Bitcoin allocations could increase this year as more institutions adopt Bitcoin following the launch of spot Bitcoin exchange-traded funds last year, and strategists expect the regulatory environment for cryptocurrencies to become better.