Strong Fundamentals Among Macro Concerns

Compass 165

At the start of the week, we laid out this play in the playbook:

Bitcoin’s movement remains bullish, initially targeting the $104K–$106K zone. Once there, if enough liquidity is gathered, the movement could extend to the next bear liquidation area at $108K–$110K.

Bitcoin reached $107K but failed to hit the $108K–$110K target. It couldn’t sustain its bullish momentum or and is now back at the bottom of the $104K–$106K zone, despite the positive catalysts surrounding Bitcoin and the broader crypto ecosystem.

Now that the good omen so long anticipated for Bitcoin has passed, what’s next?

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A Historic Day for Bitcoin

• After Trump’s inauguration and the launch of his memecoin last weekend, it seemed like we had reached the peak of the wave, with only a slow decline ahead. But it didn’t take long for the wave to surge again, reaffirming what many of us were already anticipating.

• Specifically, the revocation of SAB 121, which restricted banks from providing custody services for Bitcoin and other crypto assets, paves the way for greater institutionalization—in other words, the banking of Bitcoin. Additionally, the signing of an executive order to create a "digital assets" reserve marks a significant milestone.

• While this aligns with what much of the broader crypto community has been waiting for, it has left many Bitcoiners uneasy. The idea of a strategic reserve that includes Bitcoin alongside XRP or SOL feels inconsistent with Bitcoin’s ethos.

• Nevertheless, this doesn’t detract from the significance of what has transpired—an event few would have thought possible so soon, especially considering it’s only been a year since the launch of Bitcoin ETFs.

• What we’ve witnessed over the past few days has been more of a “sell the news” event, though not a full selloff, but certainly marked by significant volatility. Once this storm subsides, we’ll likely be able to assess more calmly what comes next and whether the framework currently taking shape can truly materialize.

Speedometers indicating the current state of BTC. The full dot represents the current reading and the white dot represents one week ago.

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Fundamentals suggest an upward movement, but why haven't we broken past 110K?

If Bitcoin has been able to sustain and consolidate above $100K, it's due to the recovery in liquidity and network growth. This scenario is one we've been closely monitoring, and the two conditions we considered crucial for the next upward breakout—improved