While various specialists claim that bitcoin (BTC) will reach new record prices this year, there are indications that predict a different scenario. This was stated on January 10 by the popular analyst Willy Woo via X, a social network where he has more than 1 million followers.
“Bitcoiners, the sentiment seems to be super optimistic, but I say you have to be careful in the coming months,” alert Woo. There are different factors that support your vision.
The analyst elaborates that risk is reaching its peak for the first time in this cycle, according to the on-chain Local Risk Model indicator.
This risk indicator, which measures whether the market is overheatedhas reached its highest level since the beginning of 2023, when the crypto winter ended. Current levels have been seen during the bull market euphoria of 2021 and during the following crypto winter.
This can be seen in the following graph, where the price of bitcoin appears in the upper margin and the risk indicator in the lower margin.
Therefore, this panorama It does not necessarily mean the beginning of a bear marketbut there is the possibility that the bull market is entering a state of overheating.
“There are a lot of coins in profits that have been sold,” adds the specialist. Bitcoin has appreciated more than 120% in the last year, outperforming major assets, which may motivate many to sell.
For Woo, “there is a lot more profit-taking ahead before we properly reset.” In this way, it does not rule out the possibility of further price drops for bitcoin before the possibility of it continuing to rise.
Meanwhile, bitcoin is trading around $95,000 (USD), 13% below its all-time high three weeks ago. This record was USD 108,000.
There is macroeconomic uncertainty that can impact bitcoin
In the middle of this terrain, the giant banking entity Bank of America said who does not expect interest rate cuts in the United States this year. Attribute this to the data published today on the labor market, which shows strengthening.
Last year’s interest rate cuts in the economic powerhouse have been among the factors that contributed to the currency’s rise. Therefore, this change in monetary policy would add challenges to the bitcoin market.
However, from another perspective, the Citigroup bank has said that it maintains its projection of five cuts this year, but with them starting only in May. This occurs despite the fact that the Federal Reserve (Fed), Central Bank of the United States, has predicted at the end of 2024 two cuts for 2025.
This scenario adds uncertainty to the markets, which can be seen translated into high volatility for the price of bitcoin. Meanwhile, attention remains on the moves made by Donald Trump, who will take office as president of the United States on January 20 and has been pro-cryptocurrencies during his campaign.