• With increased adoption, Bitcoin’s on-chain data confirmed a “local” bottom at $90K. 
• However, breaking $99K amid macro volatility requires solid groundwork.

Inflation in the U.S. rose slightly in October, ticking up by 0.2% monthly, spooking the stock markets. The S&P 500 snapped its seven-day winning streak as the “Trump dump” that followed the election began to fade.

In contrast, Bitcoin [BTC] diverged from U.S. indexes, climbing over 4% to close at $95,883. This rebound came after four straight days of losses following its record high of $99,317.

While Bitcoin’s Trump-related rally fizzled out over a week ago, the asset’s resilience amid increasing economic uncertainties – particularly fears of rising consumption costs due to high tariffs – stands out.

This price action, just before Thanksgiving, has sparked speculation. U.S. investors may sustain their trading appetite to push BTC back to $99K.

However, this bullish hypothesis awaits confirmation from convincing on-chain data.

BTC on-chain data signals bottom formation

Unlike the March cycle, when greed soared past 90, this time the index has stayed below this threshold. However, the prevailing euphoria offers a prime opportunity for strategic investors to secure profits. Investors could exit as millionaires or billionaires during this period.

Furthermore, with the “Trump trade” settling, approximately one million BTC, acquired at an average price of $93,447 by 917K wallets, are banking on bullish on-chain data to validate their commitment to the $100K target.

Bitcoin’s resilience amid inflationary pressures hints at a potential bottom forming near $90K, a level briefly tested as short-term holders offloaded their positions.

This could create a strong baseline for fresh FOMO, potentially incentivizing long-term commitment and setting the stage for a new rally, as illustrated in the chart below.

Three days ago, negative net flow triggered significant activity from retail investors, with over 13K BTC being accumulated at an average price of $91K. 

This accumulation solidifies a crucial liquidity point, positioning the market for potential upside as investors take advantage of perceived bargain prices. 

Additionally, large players seem to have expressed gratitude for the year’s rally this Thanksgiving, with over 20K BTC withdrawn.  This contributed to the price rebounding within the $96K band.

Together, retail and institutional investors have strategically targeted the recent “dip” to $90K, driving a notable uptick in adoption. This has helped counteract the downward pressure from short-term holders (STHs) and reinforced a strong bottom.

However, while a bottom may have formed, it’s important to note that this could represent a “local” bottom rather than a true “market” bottom.

A reversal remains a possibility unless Bitcoin shows similar activity at price levels historically seen as “high-risk,” like the $99K level, where strong resistance still exists.

99K resistance requires both micro and macro support

BTC’s on-chain data shows strong support at $90K, with investor reactions likely preventing further declines and establishing a local bottom for a potential rebound.

As a result, Bitcoin is back in the $96K range, restoring net profits after wiping out gains made during the final trading days of the election cycle.

In the coming days, monitoring these on-chain datasets will be crucial to determine if BTC can hold steady within the $95K to $97K range. This stability could pave the way for further upside to $99K, where significant activity is expected.

To begin with, the 256.92K addresses holding around 208K BTC acquired at an average price of $98,309 will be ‘in the money’. What they do next will play a crucial role in shaping Bitcoin’s price action.

Secondly, both “anticipation” and “execution” will play critical roles. While few may expect a breakout above $100K, driven by social media hype, others will likely begin executing their exit strategies, as seen in recent market behavior.

Thus, the responsibility of establishing $99K as a new bottom will fall on both on-chain data and broader macroeconomic trends.

Read Bitcoin’s [BTC] Price Prediction 2024-25

In a recent survey, traders increased their bets that the Federal Reserve will lower rates by 25 basis points at its December meeting. The market is now pricing in a 64.7% chance of this happening, up from 55.7% just a week ago.

This shift could provide a solid foundation for BTC to break the $100K mark. This is especially true if combined with bullish on-chain data, including whale activity, institutional inflows, and long-term holder commitment at the $99K price point.