As Trump Inauguration Nears, Analysts Name Key Forces Driving Bitcoin Toward $100,000

As the United States prepares for Donald Trump’s inauguration, speculation has intensified about Bitcoin’s ability to surge beyond the $100,000 mark. CryptoQuant, Glassnode, and Santiment — prominent blockchain analytics firms — report that exchange reserves have reached near seven-year lows, suggesting a potential supply squeeze.

Researchers at Bitwise, led by analyst André Dragosch, say hedge funds are buying at discounted prices, possibly tightening liquidity. Meanwhile, Ryan Lee, chief analyst at Bitget Research, notes that limited trading volume could still act as a drag on a sustained rally.

Bitcoin dipped on Monday, but rebounded quickly to $95,000.Source: BNC Bitcoin Liquid Index

Data indicates that Bitcoin’s total reserves on exchanges are hovering around 2.35 million BTC, a figure not seen since 2018. According to Dragosch, hedge fund activity is rising, with many funds adding to their Bitcoin positions instead of trimming them. In a statement on social media platform X, Dragosch said, “Global hedge fund beta to Bitcoin has climbed from its cycle lows, indicating that institutional buyers are positioning for a potential breakout.” These developments have fueled optimism that Bitcoin could break above the psychologically significant $100,000 barrier.

Source: Dragosch X

However, not all signs point to an immediate rally. Research from Santiment underscores a decline in overall crypto trading volumes, reflecting lingering caution among retail investors. This diminished activity may limit Bitcoin’s upward momentum in the short term, an assessment echoed by Lee from Bitget. He explains that even though market sentiment appears to be improving, “technical analysis shows low trading volume on the daily timeframe, indicating insufficient momentum to overcome current resistance.”

Aditya Bhave, an analyst at Bank of America, adds that concerns over inflation could hamper the bullish narrative. Minutes from the Federal Open Market Committee (FOMC) highlight anxiety around rising prices, and if the Federal Reserve becomes more cautious about rate cuts, risk assets such as Bitcoin could feel the effects. Echoing similar warnings, Michael Strobaek, global chief investment officer at Lombard Odier, points out that macroeconomic headwinds — including potential tariffs and a strengthened U.S. dollar — may overshadow Bitcoin’s supply-driven tailwinds.

Still, many market participants see promise. Whale Alert, a service tracking large crypto transactions, recently documented significant transfers of Bitcoin from exchanges to private wallets, hinting at accumulation among big holders. Eloísa Cadenas, chief innovation officer at Monetae, interprets the outflows as a sign of renewed investor confidence. She suggests that if current buying pressure continues, Bitcoin could reclaim the $100,000 level in the near future, potentially ushering in additional gains.

In short, the path to six-figure Bitcoin hinges on several moving parts: institutional accumulation, low exchange reserves, and the possibility of dovish monetary policy. In the short term, however, the market likes Trump, so all eyes will be on Bitcoin, looking for the “Trump Pump”.

Trump is expected to issue Executive Orders that are Pro Crypto and Bitcoin on the first day of his presidency. Source: Washington Post