Bitcoin price seasonality data calls for $120K in Q1, but leverage remains BTC’s ‘biggest risk’
2025.02.06 17:59
Bitcoin (BTC) continued its downtrend this week, dropping briefly below $95,600 during the trading day. With a demand zone between $94,300 and $95,800, the crypto asset has exhibited a liquidity sweep of equal lows around $96,200, but a clear bullish reversal has yet to take place in the short term.
Bitcoin 1-hour chart. Source: Cointelegraph/TradingView
Bitcoin on track to topple 120K, says analyst
Mikybull, a crypto analyst, pointed out that despite BTC’s current consolidation phase, the crypto asset could potentially reach a new all-time high of $120,000 if it follows its seasonal pattern from 2018 to 2014.
Bitcoin one-year seasonal 2018-2024. Source: X.com
As illustrated in the chart, Bitcoin has witnessed an uptrend on average during February, and with respect to the seasonality data, it is currently on track to trend higher in 2025 as well.
Since 2013, Bitcoin has delivered an average return of 14.08% in February, with the month ending in a decline only twice in the past decade. Its average Q1 returns also stand at 52.43%, behind Q4’s average returns of 84% since inception.
Bitcoin 4-hour analysis by Danny Marques. Source: X.com
Similarly, Danny Marques, a markets researcher, also believed that BTC’s recent drop down to $91,000 was the local bottom. The analyst added,
“Bitcoin will be going to $120k+ sooner than you think and it’ll be quick This is how I see next few weeks/months for those that care about charts.”
Related: Bitcoin enjoys ‘plenty’ of demand at $98K as analyst eyes RSI breakout
BTC to $110K or $80K first?
Despite arguments supporting a local bottom, Alphractal, a data analysis platform, highlighted leverage trading as Bitcoin’s “greatest risk” which may open the possibility of a $80,000 retest.
Bitcoin liquidity zone and open interest gap. Source: X.com
In an X post, the analytics platform said that there was a notable increase in long positions during October 2024, which created a significant liquidity gap between $72,000 and $86,000, where low trading activity took place.
Thus, a sharp drop below $80,000 remains a possibility to liquidate the long positions built since November 2024.
Bitcoin aggregated liquidation levels. Source: X.com
On the other hand, there is also a cluster of short positions just above $111,000, which were opened in December 2024, but it is important to note that there are twice as many longs compared to shorts.
Additionally, the decrease in open interest from $76 billion to $59 billion implied a reduction in the use of leverage in the market, which could signal less risk appetite among traders, potentially affecting Bitcoin’s price stability over the next few weeks.
Related: 4 reasons why Bitcoin remains bullish with BTC price above $98K
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
