Bitcoin price experienced a significant drop, falling into the $88,000s yesterday, marking a decline of over 4%. The cryptocurrency is currently hovering close to its seven-day low of $88,091, sitting approximately 4% beneath its seven-day high of $92,805. Bitcoin’s global market capitalization currently sits at $1.77 trillion, accompanied by a 24-hour trading volume of $48 billion. In light of the recent decline, JPMorgan continues to express optimism regarding Bitcoin’s long-term price trajectory. The bank is steadfast in its gold-linked volatility-adjusted BTC target, projecting it to reach $170,000 within the next six to twelve months. Experts indicate that the model takes into consideration the variations in price and mining expenses. One key factor in the market is Strategy, recognized as the largest corporate Bitcoin holder. The firm holds a staggering 650,000 BTC. The enterprise-value-to-Bitcoin-holdings ratio, referred to as mNAV, is currently at 1.13. JPMorgan analysts characterize this as “encouraging.” A ratio exceeding 1.0 suggests that Strategy is not expected to encounter forced sales of its Bitcoin. Strategy has successfully established a reserve amounting to $1.44 billion U.S. dollars. The reserve is structured to ensure that dividend payments and interest obligations are met for a minimum of 12 months. The company is setting its sights on expanding coverage to a full 24 months.
Bitcoin faces ongoing challenges from mining pressures. The network’s hashrate and mining difficulty have experienced a decline. High-cost miners outside China are pulling back as electricity costs continue to rise and prices decline. Certain miners have liquidated their Bitcoin holdings to maintain their financial stability. JPMorgan has revised its estimate for Bitcoin’s production cost to $90,000, a decrease from last month’s figure of $94,000. Declining hashrates may lead to reduced production costs; however, the immediate impact is ongoing selling pressure from miners. Institutional investors are exhibiting a degree of caution. BlackRock’s iShares Bitcoin Trust, or IBIT, has experienced six straight weeks of net outflows. According to sources, investors withdrew over $2.8 billion from the ETF during this timeframe. The withdrawals underscore a lack of enthusiasm from traditional investors, despite the stabilization of Bitcoin prices. Analysts highlight that this trend signifies a shift from the consistent inflows observed earlier in the year. The broader market continues its recovery following the liquidation event that occurred on October 10. The crash resulted in a staggering loss of more than $1 trillion in market value across the crypto space, driving Bitcoin into a bear market. Despite a slight recovery in Bitcoin’s price this week, the momentum appears to be tenuous.
According to analysts, Bitcoin’s forthcoming significant shift is increasingly less influenced by miner activity. The outcome hinges on Strategy’s capacity to retain its Bitcoin without liquidating any assets. The mNAV ratio and reserve fund instill confidence in the company’s ability to navigate through market volatility. Additional potential catalysts are still in play. The MSCI index decision on January 15 may influence Strategy’s stock and, by extension, Bitcoin. Experts indicate that a favorable result might spark a significant rally. In a recent development, Strategy’s Michael Saylor addressed the ongoing disputes regarding the MSCI index. He emphasized that Strategy operates as a publicly traded company with a substantial $500 million software business and a treasury strategy that incorporates Bitcoin, distinguishing it from a fund, trust, or holding company. He highlighted the company’s latest moves, which encompass five digital credit security offerings amounting to more than $7.7 billion in notional value. Analysts at Bitcoin Magazine have observed that the correlation between Bitcoin and Gold has notably intensified, particularly during market downturns. This trend provides a more transparent perspective on Bitcoin’s purchasing power when compared to Gold rather than USD.
Bitcoin has officially entered a bear market, breaking below the 350-day moving average of approximately $100,000 and the significant psychological level of $100K, resulting in an immediate drop of around 20%. As USD charts indicate a peak in 2025, Bitcoin, when measured against Gold, reached its zenith in December 2024 and has since plummeted by more than 50%, hinting at an extended bear market ahead. Historical Gold-based bear cycles suggest potential support zones are nearing, as current declines stand at 51% over 350 days, highlighting institutional adoption and limited supply instead of shifts in the cycle.